Public Procurement Contract

Document Sample
Public Procurement Contract Powered By Docstoc
					                         PUBLIC PROCUREMENT LAW

                                   I. BASIC PROVISIONS

                               1. The Subject of the Law
                                The Scope of Regulation
                                        Article 1
        This Law lays down: the conditions, the manner and the procedure for
procurement of goods, services, and works when the procuring entity is a state organ,
organization, institution or some other legal person ascertained bythis Law; the manner
of keeping records of contracts and other data concerning public procurement, as well as
the manner of protecting the tenderers’ rights; the establishment of the Public
Procurement Office as an organization authorized to deal professionally with tasks
pertaining to public procurement and other public procurement issues of importance.

                            Procurements Exempt from the Law
                                           Article 2
        The provisions of this Law shall not apply to:
        1) public service contracts awarded to an entity which is itself a procuring entity
within the meaning of this Law and have been established for the purpose of providing
services that are the subject of public procurement;
        2) procurements in pursuance of an international agreement pertaining to
supplying goods, performing work, providing services or public tenders for design,
stipulating joint implementation or exploitation of a project on the part of the states or
organizations having concluded the agreement;
        3) procurements for ensuring fundamental life conditions in the case of natural
disasters, other accidents or damages, according to the regulations on protection against
such disasters, accidents or damages;
        4) procurements of armaments and other procurements of confidential nature as
prescribed by special regulations.
        5) goods acquired by procuring entities for the purpose of re-sale or rendering
services to third parties, provided that the procuring entity has no exclusive or special
rights of re-sale or rental of the said goods or providing of services for which the said
goods will be used.
        For procurements referred to in paragraph 1 items 4 and 5of this Article, a
procuring entity shall notify the Public Procurement Office of procurement plans for the
current year by January 31st at the latest.

                                             2. Terms

  The basic Law was published in the “Official Gazette of the Republic of Serbia”, No. 39/2002 from 5
July 2002.
Amendments to the Law are published in the “Official Gazette of the Republic of Serbia”, No. 55/2004
from 21 May 2004.
According to Article 63 of the Amending Law to the Public Procurement, it is proscribed that cases
whose processing began before the date this Law became effective shall be subject to the provisions of
this Law, provided the procedure has not been terminated with a binding decision.
The Amending Law shall come into effect on 1st July 2004 (Article 64).
                        The Meaning of Terms as Used in this Law
                                          Article 3
        Particular terms used in this Law shall have the following meaning:
        1) procuring entity shall mean:
        (à) a state body, organization, institution or another direct or indirect budget user
according to the law regulating the budget system, as well as an organization dealing
with compulsory social insurance;
        (b) a legal entity established by a direct or an indirect budget user with a specific
purpose of meeting needsin the general (public) interest, having a management board
more than half of whose members are budget users representatives or where more than
half of the votes in the management board belong to budget users representatives;
        (c) a public undertaking or an undertaking established by a public undertaking
wherein a direct or an indirect budget user, that is, another procuring entity pursuant to
this Law, owns more than 50% of the shares;
        (d) another type of undertaking linked with the bodies, organizations or legal
persons referred to in item 1, subitems (a)-(c) of this Article through the management or
in some other way, so that on the basis of that link:
        - they jointly shape the business policy and act harmoniously with the purpose of
achieving business goals, or
        - the body, organization or legal person referred to in item 1, subitems (a)-(c) of
this Article exerts a significant influence on policy decisions, financing and business
activity of this undertaking;
        2) public procurement shall mean the provision of goods and services or
awarding work assignments by a state body, organization, institution or some other
legal person regarded as a procuring entity pursuant to this Law, in the manner and
under the conditions prescribed by this Law;
        3) public procurement contract shall mean the written contract concluded
following the procedure prescribed by this Law between a procuring entity and a goods
supplier, service provider or work contractor, concerning the procurement of goods,
providing services or performing work assignments;
        4) tenderer shall mean a domestic or foreign legal or natural person offering to
supply goods, provide services, or perform work assignments;
        5) candidate shall mean the person invited by a procuring entity to submit a
tender after its qualifications have been established;
        6) open procedure shall mean the procedure whereby all interested persons may
submit tenders;
        7) restricted procedure shall mean the procedure whereby only those tenderers,
invited by a procuring
entity after their qualifications have been established, may submit tenders (candidates);
        8) negotiated procedure shall mean the procedure whereby a procuring entity
consults suppliers or contractors of its choice and negotiates the terms of the contract
with them;
        9) design contest shall mean the procedure for the award of service contract,
mainly in the fields of area planning, town planning, architecture and civil engineering,
engineering, design or data processing, a plan or design shall be selected by a prior
established jury
        10) price offered shall mean the price ascertained by a tenderer pertaining to
public procurement, expressed in Yugoslav dinars; when public procurement items are
imported goods, the prices shall include the custom tax and other import taxes;



                                                                                           2
         11) abnormally low price shall mean a tender price that is so low to make a
procuring entity doubt that public procurement will be performed;
         12) criterion shall mean an element used for evaluating, comparing or assessing
tenders;
         13) requirement shall mean an exclusive element that has to be fully complied
with in tender, in the manner prescribed by tender documents;
         14) qualification requirement shall mean a requirement contained in tender
documents that is significant for effecting the contract notice, and that must be fully
complied with in tender as it constitutes a prerequisite for ascertaining the tenderer’s
capability;
         15) qualification procedure shall mean the manner of conducting the first stage
of the restricted procedure applied in awarding public procurement contracts in water,
energy, telecommunications and transport;
         16) request for participation shall mean an application submitted to a procuring
entity in the qualification procedure by any interested person;
         17) updating the criteria and requirements shall mean occasional adjustment
effected by a procuring entity in the course of the qualification procedure, with regard to
the market conditions, development and other circumstances;
         18) timely tender shall mean a tender submitted to a procuring entity meeting
the deadline specified in the contract notice;
         19) correct tender shall mean a tender submitted in a timely manner, for which
it has been established, following the opening, examination and evaluation of the
tenders, that it fully complies with the requirements contained in tender documents;
         20) adequate tender shall mean a tender submitted in a timely manner, for
which after opening of tenders, and based on the review and evaluation, has been
ascertained, that it fully complies with all the technical specifications;
         21) acceptable tender shall mean a tender submitted in a timely manner, for
which after opening of tenders, and based on the review and evaluation, has been
ascertained, that it fully complies with all criteria, requirements and eventual
qualification requirements;
         22) discount on the tender price shall mean the method of determining the price
that a tenderer may offer only when a contract is awarded by lots and a procuring entity
shall not consider it as an element of additional privilege;
         23) goods shall mean movable and immovable objects, products and equipment,
electricity, raw materials and reproductive materials in solid, liquid and gaseous state;
         24) public funds shall mean funds controlled by and at the disposal of the
Republic, an autonomous territorial unit, local authorities and compulsory social
insurance organization.

                               List of Procuring Entities
                                        Article 4
       - Deleted


                          3. Public Procurement Principles
        The Principle of Economy and Efficiency in the Use of Public Funds
                                       Article 5
      A procuring entity shall ensure that the public procurement procedure is
conducted and the selection of tenderers made within the time limits and in the manner



                                                                                         3
prescribed by this Law, incurring as little costs as possible in the effecting public
procurement.

              The Principle of Ensuring Competition among the Tenderers
                                         Article 6
        A procuring entity may not limit competition among the tenderers; in particular,
a procuring entity may not prevent any tenderer from participating by unjustified use of
the restricted procedure or by using discriminatory criteria.
        Persons who have been engaged in preparing tender documents or parts thereof
may not appear as tenderers or subcontractors, nor may they cooperate with the
tenderers in the course of preparing their tenders.
        A procuring entity may not request that a tenderer should engage a particular
subcontractor or engage in any other transaction, such as exporting certain goods or
services unless otherwise stipulated by a special law or international agreement or
unless it is specified in tender documents that a procuring entity has to engage a certain
number of domestic subcontractors or to include a certain quantity or value of domestic
goods and services.

                The Principle of Transparency in the Use of Public Funds
                                        Article 7
        Public funds may be used only for the purposes determined by a contract
concluded in the public procurement procedure.
        A contract notice for public procurement shall be published in the Official
Gazette of the Republic of Serbia and, where the value of the procurement exceeds the
sum of 3,000,000 dinars for goods and services or 15,000,000 dinars for works, a
contract notice shall also be published in one daily newspaper distributed on the entire
territory of the Republic.
        A person who has participated in public procurement procedure shall have the
right to access the data concerning the conducted public procurement procedure
according to this Law.

                          The Principle of Equality of Tenderers
                                         Article 8
        A procuring entity may not impose conditions that would constitute territorial,
subject or personal discrimination among tenderers, or discrimination arising out of the
classification of the business performed by the tenderers.
        Determination of the origin of goods or services is permitted in the cases and for
the purposes stipulated by special regulations.
        A procuring entity shall not exclude any tender merely because the tenderer’s
seat is located in a state with whom Yugoslavia has not concluded an agreement on
equal treatment of domestic and foreign tenderers.

  4. Protection of Data and Documentation and Keeping Records of the Procedure
                                      Data Protection
                                         Article 9
        A procuring entity shall keep as confidential all data on tenderers contained in
the tender that are designated as confidential by a special act.
A procuring entity may refuse to disclose information that would entail a breach of
confidentiality of data received in a tender.



                                                                                        4
        A procuring entity shall keep the names of tenderers and their tenders as a trade
secret until the expiry of the time limit determined for opening of tenders.

                             Determination of Confidentiality
                                         Article 10
       When disseminating technical specifications concerning the awarding of public
procurement contracts to tenderers, a procuring entity may require the protection of
confidentiality of the information placed at their disposal.
       A person who has received data designated as confidential shall observe their
confidentiality irrespective of the degree of confidentiality stipulated.

                Documentation and Keeping Records of the Procedure
                                      Article 11
       A procuring entity shall keep records of all the phases of the contract award
procedure.
       A procuring entity shall keep all the documentation pertaining to public
procurement according to the regulations concerning documentation and archives.
       A procuring entity shall keep records of public procurement contracts awarded
in negotiated procedures.

                                 Documentation Archive
                                       Article 12
       If the period stipulated for keeping documentation pursuant to the provisions of
Article 11 paragraph 2 of this Law expires before the deadline stipulated for the
execution of a public procurement contract, a procuring entity shall keep the
documentation for a period of three years following the expiry of the deadline for
contract execution.

                     5. Language in Public Procurement Procedure
                                         Article 13
         A procuring entity shall prepare tender documents and conduct the procedure in
Serbian language.
         Tender documents for public procurement of goods and services exceeding
12,000,000 Yugoslav dinars or for work assignments exceeding 120,000,000 Yugoslav
dinars shall be prepared by a procuring entity also in a foreign language commonly used
in international commerce.
         A tenderer shall submit his tender in the language used in tender documents, that
is, in the language specified by a procuring entity in tender documents.

                                          Article 14
        A procuring entity may allow that tenders, in their entirety or in part, are
submitted in a foreign language, especially in the section pertaining to technical
characteristics, quality and technical documentation.
        In the case referred to in paragraph 1 of this Article, a procuring entity shall
specify which part of a tender may be submitted in a foreign language and which
foreign language it is to be used.
        If, in the course of the revision and evaluation of tenders, a procuring entity
finds that a part of a tender should be translated into Serbian language, it shall set a time
limit to the tenderer for translating the part of the tender into Serbian.



                                                                                           5
       In the case of dispute, the Serbian version of tender documents and tender shall
be prevailing.

                                      6. Currency
                                       Article 15
        The values in tender documents and tenders shall be stated in Yugoslav dinars.
        A procuring entity may demand from tenderer to state the values also in a
foreign currency, in which case it shall be stated that the values shall be converted into
Yugoslav dinars using the medium exchange rate of the National Bank of Serbia valid
on the day of the opening of tenders.

                                      Article 16
        If a tenderer has been allowed to submit a tender in a foreign currency, in the
case pursuant to Article 15 paragraph 2 of this Law, a procuring entity shall specify in
tender documents the currency which can be used to state the values in the tender.

                                 7. Anticorruption Rules
                                        Article 17
        A procuring entity shall reject a tender if there is a verifiable evidence that a
tenderer has given or promised to a current or former employee of a procuring entity a
gift in money or in a non-monetary form, or that the tenderer offered employment or
any other benefit, an object or a service that may be expressed in terms of money, in an
attempt to influence an action, decision making or the further course of the public
procurement procedure.
        A procuring entity shall inform, in writing, the tenderer referred to in paragraph
1 of this Article, as well as the Public Procurement Office, that the tender in question
has been rejected and of the reasons for rejection, and to keep a record of this in the
documentation pertaining to the public procurement procedure.


                       II. PUBLIC PROCUREMENT OFFICE

                                Manner of Establishment
                                        Article 18
        Public Procurement Office (hereinafter referred to as: the Office) has been
established as a special organization for performing expert work in the public
procurement realm, in order to ensure in public procurement that proper conditions exist
for economic, efficient and transparent use of public funds and to induce competition
and equality of tenderers in public procurement procedure.
        The regulations pertaining to the state administration shall apply to the activity
and organization of the Office.

                                      The Mandate
                                        Article 19
       The mandate of the Office includes:
       1) the participation in drafting the regulations pertaining to the sphere of public
procurement;
       2) providing consulting services to procuring entities and tenderers;
       3) organizing staff training for work in the field of public procurement;



                                                                                        6
        4) cooperation with foreign institutions and experts in the field of public
procurement;
        5) the publication and distribution of relevant professional literature;
        6) preparing standard tender documents and standard contracts for public
procurement;
        7) collection of the information on public procurement in other states;
8) systematic collection of information from procuring entities and keeping records of
data in the field of public procurement;
        9) the preparation of and participation in determining the criteria for evaluating
particular sorts of expenses incurred by public funds beneficiaries;
        10) the preparation of a common database for keeping a record of tenderers and
their creditworthiness, on the basis of concluded and effected public procurement
contracts;
        11) monitoring the public procurement procedure;
        12) cooperation with other state bodies and organizations, compulsory social
insurance organizations, as well as bodies of an autonomous territorial unit and local
government;
        12a) submission of a request for the protection of the public interest;
        13) other work according to the law.
        Once a year the Office shall submit to the Government an annual report on
public procurement, including a proposal for measures to be undertaken.


      III. THE PROCEDURE AND METHOD FOR AWARDING PUBLIC
                    PROCUREMENT CONTRACTS

                          1. Public Procurement Procedure
                                 Types of Procedure
                                      Article 20
       Public procurement contracts shall be awarded in the open procedure.
       Public procurement contracts may be awarded in the restricted procedure or in
the negotiated procedure.

                       Award of Contracts by Open Procedure
                                       Article 21
       The open procedure is a procedure wherein all persons interested in obtaining
public procurement contract may submit a tender according to previously defined
requirements by a procuring entity specified in tender documents.

                      Award of Contracts by Restricted Procedure
                                       Article 22
        The restricted procedure is a procedure where in the first phase a procuring
entity recognizes tenderers’ qualifications on the basis of previously determined
qualification requirements, whereas in the second phase a procuring entity invites all the
tenderers whose qualifications have been established to submit a tender.
        A procuring entity may apply restricted procedure only in the case when the
subject of public procurement are such goods, services or construction work that, with
regard to technical, staff and financial capacity, may be delivered, provided or
performed only by a small number of tenderers.



                                                                                        7
         Prior to the publication of the public invitation for the first phase of the
restricted procedure, a procuring entity shall obtain the opinion of the Office, which
shall issue its opinion within seven days of having received a procuring entity’s request.
         If the Office fails to submit its opinion within the deadline referred to in
paragraph 3 of this Article, a procuring entity may proceed with the public procurement
procedure.
         A procuring entity may also apply the first phase of the restricted procedure in
the case when it is not possible to plan public procurement in advance in terms of
quantities and time and which can be carried out immediately, and is not to be effected
according to special requests of a procuring entity, but according to the market
conditions.
         Paragraph 6 - Deleted.

   Award of Contracts by Negotiated Procedure without Prior Publication and after
                         Prior Publication of the Contract Notice
                                         Article 23
        A procuring entity may award a contract by negotiated procedure without prior
publication of a contract notice if:
        1) for objective reasons or for reasons connected with the protecting of exclusive
rights, public procurement may be effected only by particular goods suppliers, service
providers or contractors;
        2) for reasons of irregular circumstances, that is, unforeseen events whose onset
is outside the control of the procuring entity, a procuring entity was unable to observe
the time limit for the open and restricted procedure.
        3) in the event that no tenders whatsoever or only inadequate tenders have been
received in the open or restricted procedure.
        In the case referred to in paragraph 1 item 1of this Article, a procuring entity
shall request for the opinion of the Office.
        The Office shall issue its opinion within seven days after the receipt of the
request.
        A procuring entity shall no later than three days after the selection of the most
favorable offer submit to the Office a report on the award of a public procurement
contract from paragraph 1 items 2 and 3 of this Article containing data prescribed by
Article 81 of this Law.
        If the Office fails to forward its opinion within the deadline specified in
paragraph 3 of this Article, a procuring entity may proceed with the public procurement
procedure.
        A procuring entity may award a contract by negotiated procedure following
publication of a prior notice provided only inadequate or unacceptable tenders are
received in the open or restricted procedure, in so far as the original terms of the
contract are not altered. A procuring entity which issues to all tenderers who took part
in an open or restricted procedure an invitation for new tenders in a negotiated
procedure after prior publication of a contract notice is not obliged to issue a new public
notice for tenders.
        A procuring entity shall ensure in the course of negotiations that the price does
not exceed the comparable market price and to check the quality of the subject of public
procurement with due diligence.

                            2. Institution of a Procedure
                         Conditions for Instituting a Procedure


                                                                                         8
                                        Article 24
        A procuring entity may institute the public procurement procedure if the
procurement in question is envisaged by the procurement plan and if funds for that
particular procurement contract have been set aside in thebudget of the Republic of
Serbia (hereinafter referred to as: Republic Budget), of an autonomous territorial unit,
local government or in the financial plan according to the Law on Budget System.
        The funds set aside for a particular public procurement contract may not exceed
the amount stipulated by the regulation pertaining to budget spending and public
financing.
        If a public procurement procedure lasts for several years, the liabilities that will
fall due in the following years shall be agreed and stated in the amounts stipulated by
the regulation on budget spending for each particular year.
        If the public procurement in question concerns investments, a procuring entity
shall prepare the investment program according to the common methodology for
preparing investment programs, according to the development plan.
        The program referred to in paragraph 4 of this Article shall be approved by the
chief executive officer of a procuring entity with a decision in writing.
If the Republic Budget, the budget of an autonomous territorial unit, the budget of a
local government or the financial plan of another procuring entity has not been passed, a
procuring entity may institute the public procurement procedure up to the amount of the
funds planned according to the regulations on temporary financing.

                            Decision to Institute a Procedure
                                        Article 25
       A procuring entity shall institute the public procurement procedure by a written
decision which contains:
       1) the registry number of the public procurement for the current year;
       2) the subject of public procurement;
       3) the value of public procurement according to a procuring entity’s estimates
and the expectations concerning the tenders;
       4) the reference to the decision on approving public procurement of investments,
pursuant to the uniform methodology, when necessary;
       5) provisional dates for conducting the individual phases of the public
procurement procedure and
       6) the data on the budget position or the financial plan for payment.
       The decision may also contain other elements if a procuring entity considers
them necessary for conducting the public procurement procedure.
       When passing the decision to institute a public procurement procedure, a
procuring entity shall at the same time establish a Commission for public procurement
(tender board), pursuant to prescribed criteria for the establishment of such
Commissions.
       Acting upon the proposal of the Minister of Finance and the Economy, the
Government shall establish the criteria for establishing public procurement
Commissions.

       Conducting a Public Procurement Procedure by another Legal Person
                                      Article 26
       A procuring entity may authorize in writing another legal person to carry out the
procurement procedure on its behalf and for its account.



                                                                                          9
        In the procurement procedure for awarding public contacts in waterworks,
energy production, telecommunications and traffic sectors, a procuring entity may
decide to use the list of qualified tenderers of another procuring entity.
        The decision on using the list of qualified tenderers of another procuring entity
shall be made in writing and has to contain an explanation.

                           3. The Content of Tender Documents
                              Preparation of Tender Documents
                                           Article 27
         A procuring entity shall prepare tender documents so that the tenderers may
prepare correct tenders on the basis of these documents.
         The data contained in tender documents shall be identical to the data contained
in the public invitation for tenders.
         Tender documents for the open procedure and for the second phase of the
restricted procedure contain:
         1) an invitation to submit tenders;
         2) instructions to tenderers on how to prepare a tender;
         3) a tender form;
         4) a form for establishing the tenderer’s qualifications and instructions on how
to prove the tenderer’s qualifications (only in the case of the open procedure);
         5) a form wherein the tenderer states that he accepts the conditions set forth in
the public invitation and tender documents for tenders;
         6) a model contract;
         7) the type, technical characteristics (specifications), quality, quantity and
description of goods, services or work, the manner of executing control and ensuring a
guarantee of quality, the deadline for executing the contract, the place of execution or of
the delivery of goods, potential additional services
and the like;
         8) the technical documentation and plans;
         9) the invoice form, including instructions on how to fill it in and
         10) the type of instruments of financial security whereby the tenderers ensure the
fulfillment of their liabilities in the contract award procedure (various forms of pledging
securities, movable property, mortgages, bills of exchange,
guarantees given by other legal person possessing adequate creditworthiness, bank
guarantees, insurance policies, etc.).
         Tender documents may contain other elements that are, in view of the subject of
public procurement, necessary for the preparation of tenders.
         Tender documents in the first phase of the restricted procedure contain:
         1) an invitation to submit tenders;
         2) instructions to tenderers on how to prepare a tender;
         3) a tender form and
         4) a form for establishing the tenderer’s qualifications and instructions on how
to prove the tenderer’s qualifications.
         The Minister of Finance and the Economy shall regulate more closely the
compulsory elements of tender documents.
         The law regulating more closely the annual Budget of the Republic shall
stipulate the amount of public procurement funds above which A procuring entity shall
demand a bank guarantee in the public procurement procedure.

                            4. Access to Tender Documents


                                                                                        10
                     Time Limit for Submission of Tender Documents
                                        Article 28
        As of the day of the publication of the invitation for tenders, a procuring entity
shall enable interested tenderers to have a direct insight into tender documents or shall
send the documents by post, telefax or e-mail within two days of having received a
request from a tenderer.
        In the case referred to in paragraph 1 of this Article, a procuring entity shall
charge only the costs of copying and sending tender documents.
        In the open procedure a procuring entity may confine the time limit during
which the tenderers may request tender documents this shall not be less than a half of
the time limit for tenders submission.
        A tenderer may not set a higher price afterwards, claiming that tender documents
are incomplete or inadequate concerning the segments of public procurement execution
that were not specified in tender documents if these segments could have been predicted
with regard to the subject of public procurement and the documentation in its entirety.

                   Alterations of and Supplements to Tender Documents
                                          Article 29
         If within the time limit for submission of tenders a procuring entity alters or
supplements tender documents, it shall forward these alterations and supplements
without delay and with no charge to the tenderers who have already taken tender
documents.
         A tenderer may request in writing additional information or clarifications
concerning the preparation of a tender up to five days before the expiry of the time limit
for tenders submission.
         In the case referred to in paragraph 2 of this Article, a procuring entity shall send
a written reply to the tenderer within the time period and in the manner stipulated in
Article 28 paragraph 1 of this Law, and shall at the same time forward the information
to all other tenderers who have received tender documents.
         If tender documents or supplementary documents are too extensive, or if a
tender can be prepared only after a direct inspection of the place where public
procurement is to be effectuated, or if a procuring entity amends tender documents six
or less days before the expiry of the deadline for submission of tenders, a procuring
entity shall extend the time limit for submission of tenders.
         A procuring entity shall inform in writing all tenderers who have received tender
documents of the extension of the deadline for submission of tenders referred to in
paragraph 4 of this Article.
         The decision on the extension of the deadline for submission of tenders shall be
published in the same way as the public invitation of tenders.
         After the expiry of the deadline for submission of tenders, a procuring entity
may not alter or supplement tender documents.

                           5. Determining the contract value
                   Determining the Value of Public Supply Contracts
                                         Article 30
       The basis for calculating the estimated value of public supply contracts shall be
determined in the following manner:
       1) in the case of contracts for sale, rental or lease of goods and when the contract
term is a period of 12 months or less, the total contract value for its duration shall be
taken into account, when the contract term is longer than 12 months, the total contract


                                                                                           11
value shall include the value for the first 12 months and the value for the residual
period;
        2) in the case of contract referred to in paragraph 1 item 1 of this Article is
concluded for an indefinite period, the monthly value of the contract multiplied by 48
shall be used.
        In the case of contract for an indefinite period or if it is to be renewed after the
expiry of a certain time limit, the estimated public procurement value shall be
determined on the basis of actual aggregate value of similar contracts concluded over
the previous fiscal year or in the course of the previous 12 months, adjusted for
anticipated changes in quantity or value of the goods whose procurement is the object of
the contract over 12 months, following the conclusion of the initial contract.

                    Determining the Value of Public Service Contracts
                                        Article 31
        When calculating the estimated contract value of public service contracts, a
procuring entity shall include all the expenses concerning the service in question
incurred by the tenderer.
        For the following type of services account shall be taken:
        1) as regards insurance services - of the premium payable,
        2) as regards banking and other financial services - of fees, commissions and
interest as well as other types of remuneration,
        3) as regards contracts which involve architectural services, industrial design,
landscape planning and the like – of the fee or commission payable.
        If a procuring entity cannot determine the estimated contract value due to the
length of its duration, the contract value shall be determined in the manner prescribed
by Article 30, paragraph 1 of this Law.

                   Determining the Value of Public Works Contracts
                                         Article 32
        The total value of public works contracts shall be determined by taking the total
construction value as the basis for calculating the value of works contract.
        When determining the value of construction works contracts, a procuring entity
shall include the value of all the goods and services necessary to perform the contract.
The value of public procurement of construction works shall not include the value of
goods and services not necessary to perform construction works contract.

                     Determining Public Procurement Value per Lots
                                         Article 33
        The subject of public procurement may be shaped in a number of separate
wholes (lots), so that each lot may be subject of a separate contract.
        When the procurement is subdivided in separate lots and each one the subject of
a separate contract, for the purpose of calculating the procurement value, the value of all
lots over a period of one year must be taken into account, counting from the day of the
contract for the first lot.
        A procuring entity shall award separate lots whose total value exceeds the
amounts stipulated in Articles 69, 71, 90, 114 and 123 of this Law, pursuant to the
provisions of this Law.
        The decision on shaping public procurement in lots and on determining the
values of these lots shall be approved by the Public Procurement Office.



                                                                                         12
                The Method of Determining Public Procurement Value
                                        Article 34
        A procuring entity shall not select the procurement valuation method so that, due
to a lower estimated value, the public invitation for tenders is avoided.
        The estimated public procurement value shall be stated without including the
turnover tax.

    6. General Rules on Determining Technical Elements in Public Procurement
                                Technical Specifications
                                        Article 35
        Technical specifications constitute an obligatory part of tender documents.
        A procuring entity shall state technical specifications in tender documents
pertaining to each single public procurement.
        A procuring entity shall define the technical specifications referring to the laws,
technical regulations and standards that are in effect in the Republic; in the case when
such technical regulations or standards do not exist in the Republic, a procuring entity
shall refer to the existing European standards, technical licenses or common technical
specifications.
        The authorized ministry shall establish whether the technical regulations and
standards referred to in paragraph 3 of this Article exist.

                           The Use of Technical Specifications
                                        Article 36
         A procuring entity may not use or refer to technical specifications specifying
goods, services or works of a specific make, source, or of a particular construction, if
such a designation favours certain tenderer or might unwarrantedly eliminate other
tenderers.
         A procuring entity may not include in tender documents any provision that
would result in favouring or eliminating certain tenderers, in the manner referred to in
paragraph 1 of this Article, unless such a specification is justified by the subject of the
contract.
         A procuring entity may not indicate in tender documents any particular
trademark, patent, type, origin or production.
         Where a procuring entity is unable to give a description of the subject of the
contract in tender documents using specifications which are sufficiently precise and
intelligible to tenderers, the indication of elements like trademarks, patents, type or
manufacturer must be accompanied by the words “or equivalent”.

                                The Issuance of Attestations
                                          Article 37
         When a procuring entity awarding a service contract demands attestation to
verify the conformity with the requirements concerning quality of management and
services quality assurance issued by independent bodies or organizations, which should
confirm that the services conform to specific standards, the authorized issuer of the
attestation shall refer to the quality assurance system according to the Yugoslav JUS EN
ISO 9000 series standard, conforming to the requirements of the Yugoslav standards
JUS EN 45000 and JUS ISO/IEC 17025.

          The Content of Technical Specifications or Project Documentation
                                     Article 38


                                                                                        13
        The terms technical specifications and project documentation, as used in this
Law, denote the technical requirements that are an obligatory part of tender documents
referring to the characteristics of lots of works, materials, products, goods or services.
These specifications shall ensure that the works, materials, products, goods or services
are described in a manner that is objective and appropriate to the procuring entity’s
needs.
        Technical specifications may contain requirements of quality, performance,
safety or dimensions relating to the material, product, good, or service, concerning
quality assurance, terminology, designations, testing and the test methods, packing,
marking and labelling.
        In the case of public procurement of civil works, technical specifications may
also include regulations concerning designs and the calculation of costs, test, inspection
and taking over conditions, as well as techniques or method of construction.

                                        Exceptions
                                         Article 39
        A procuring entity, subject to the prior approval of the Office, may depart from
the provisions of Article 35 of this Law in the following cases:
        1) if the standards, technical approval or the general technical specifications or
project documentation do not contain a provision requiring conformity establishment, or
if there are no technical means to establish satisfactorily the conformity of a good or a
service with these standards, technical approvals or general technical specifications or
project documentation;
        2) if the adherence to the above-mentioned provisions would prejudice mutual
recognition of standard-type approvals for telecommunications or computer equipment,
or standardization in the field of information technologyand telecommunications, or in
other specific areas of goods or services;
        3) if the adherence to the standards, technical approvals or general technical
specifications would make a procuring entity to procure goods incompatible with the
existing equipment, or would result in disproportionately higher expenses or would
cause a procuring entity excessive technical difficulties;
        4) if public procurement contract in question is of expressly innovative nature,
so that adherence tostandards, technical approvals or general technical specifications
would be inappropriate.
        A procuring entity shall state the reasons for acting in the manner referred to in
paragraph 1 of this Article in the contract notice or in tender documents.

                 Other Methods of Determining Technical Specifications
                                         Article 40
        In the absence of standards, technical approval or general technical
specifications, the technical specifications may be defined in the following way:
        1) according to the technical specifications applicable in FR Yugoslavia and that
comply to the basic requirements applied for technical harmonization in the European
Union (especially in the case of public procurement in the information technology,
telecommunications and the like sectors);
        2) according to the technical specifications applicable in FR Yugoslavia relating
to design, method of calculation, execution of works and use of materials;
        3) according to other documents, where a procuring entity shall adhere to the
following order of preference:
        (à) the Yugoslav standard JUS which is accepted international standard;


                                                                                       14
       (b) other national standard;
       (c) the technical approval and recommendation applicable in FR Yugoslavia.

                                        Standards
                                        Article 41
        Yugoslav standard is a standard recognized by the federal body authorized for
standardization, accessible to the public.
        International standard is a standard recognized by the international
organization for standards, or, the international standardization organization, accessible
to the public.
        European standard is a standard recognized by the authorized body of the
European Union, accessible to the public.
        Foreign national standard is a standard recognized by the authorized body of a
foreign state, available to the public.
        Other standards are standards that may be accepted on a different basis (e.g.
standards applying for a particular branch of industry, company standards and the like).

                                  Technical Attestation
                                         Article 42
         Technical attestation is a positive technical assessment of suitability of a
particular product for the intended use.
         European technical approval is a positive technical assessment of suitability of a
particular product for the intended use, based on the fulfillment of basic requirements of
the intended construction work, issued by the body authorized to give technical
attestation.
         European technical attestation shall apply in the case of public procurement of
civil works.

                          Common Technical Specification
                                     Article 43
       A common technical specification is a technical specification passed according
to the procedure accepted by the Government, which is uniformly applied by all
member states of the European Union.

 Statement of Essential Requirements and Compensation Costs for the Use of Patents
                                         Article 44
        Essential requirements not included in positive technical norms and standards,
and relating to safety and other factors of general interest, shall be applied and shall be
expressly stated in tender documents.
        A procuring entity may state in tender documents that compensation for the use
of patents, as well as the responsibility for any breach of protected intellectual property
rights of third persons, shall be borne by the tenderer.

       7. Participation Conditions for the Public Contracts Award Procedure
                            Mandatory Participation Conditions
                                          Article 45
        A procuring entity shall publish in the contract notice the conditions that a
tenderer has to fulfill in order to be able to participate in the procedure.
        Domestic or foreign legal entities or natural persons shall be entitled to
participate in the procedure provided that:


                                                                                        15
         1) they are duly registered with the competent public authority to engage in
particular activities;
         2) that in a period of no less than two years before the publication of a contract
notice they had not been convicted of a criminal or other offence in the area which is the
subject of the public procurement;
         3) that they have fulfilled for the current year all obligations in respect of the
payment of due taxes, contributions and other forms of public taxation in accordance
with the laws of the Republic of Serbia, or the Republic of Montenegro, or a foreign
state if its seat is located on its territory.''
         Domestic or foreign legal entities shall be entitled to participate in the procedure
provided that:
         1) they are duly registered with the competent public authority to engage in
particular activities;
         2) that in a period of no less than two years prior to the publication of a contract
notice they had not subject to an effective judicial or administrative ban on the
performance of the activity which is the subject of the public procurement;
         3) that they have fulfilled for the current year all obligations in respect of the
payment of due taxes, contributions and other forms of public taxation in accordance
with the laws of the Republic of Serbia, or the Republic of Montenegro, or a foreign
state if its seat is located on its territory;
         4) that they possess a valid permit issued by the relevant authority for
performing activities which are the subject of the public procurement where such a
permit is stipulated by a special regulation;
         5) that they possess the necessary financial and economic standing;
         6) that they possess sufficient technical capacities.
         A procuring entity may impose additional conditions concerning the fulfillment
of the obligations of tenderer towards his subcontractors and suppliers.

                         Proofs of the Fulfillment of the Conditions
                                           Article 46
        Along with the tender, the tenderer shall submit the following proofs to evidence
that he fulfils the conditions referred to in Article 45 of this Law:
        1) a court register certificate or some other register certificate;
        2) a certificate issued by the competent tax authority of the state of the tenderer’s
legal residence, or by the competent tax authority of the Republic of Montenegro, or by
the Republic Office of Public Revenues;
        3) a certificate issued by the competent authority keeping records of licenses
issued for carrying out specific activities;
        4) a balance sheet certified by an authorized auditor, or extracts therefrom, or a
statement of the tenderer’s overall turnover in respect of the products, works or services
to which public procurement contract relates - for the previous three financial years, as
well as the opinions or statements of banks or other specialized institution, or the proofs
required in the contract notice or tender documents. A procuring entity shall specify in
the contract notice or in tender documents which element from this item it has chosen
and which other elements proving the financial and economic standing the tenderer shall
submit;
        5) one or more proofs according to the subject of the contract, the quantity and
the intended purpose, such as:
        (à) a list of the most important goods delivered, work assignments performed or
services provided over a period of the last three years, together with the sums, dates, and


                                                                                          16
lists of purchasers or procuring entities. If purchasers or procuring entities are entities
considered to be the procuring entities according to this Law, the proof to be submitted
has to be in the form of a certificate issued or countersigned by the competent authority;
if purchasers or procuring entities are other entities or entrepreneurs, the certificate shall
be issued or signed by the purchaser or the procuring entity;
         (b) a description of the tenderer’s technical equipment, measures for ensuring
quality and research and development capacity;
         (c) a statement on the key technical staff and other experts working for the
tenderer who will be responsible for the execution of the contract and on the persons
responsible for quality control;
         (d) a sample description or a photograph of the product and a description of the
works or services that the tenderer will perform or provide. In case of doubt, a procuring
entity may demand proof of the authenticity of samples, descriptions or photographs;
         (e) a certificate issued by the authorized bodies or organization authorized for
quality control, attesting the conformity of the products or services in question to the
technical specifications or the standards stipulated in tender documents;
         (f) a report of examination, if the products to be delivered are complex and
services or works are complex, or when the subject of public procurement in
exceptional cases is intended for special purposes. The examination shall be carried out
by procuring entity’s representatives or, on behalf of a procuring entity, by the
authorized body of the state of the tenderer’s legal residence. The examination relates to
the tenderer’s production capabilities, and if need be, to his capacity for research and
development, and the method of ensuring quality.
         The proofs of evidence defined in paragraph 1 of this Article may not be dated
more than six months before the date of the publication of the public invitation.
         If the tenderer’s legal residence is located in another state or in the Republic of
Montenegro, the procuring entity shall verify whether the documents by which the
tenderer is proving the fulfillment of the requested conditions have been issued by the
competent authorities of the state in question or of the Republic of Montenegro.
         If a tenderer's legal residence is located in a foreign country, the proofs of
evidence of fulfillment of conditions must be certified by the competent authority of
that country (administrative organ or court, or chamber of commerce), or that country's
embassy in Serbia and Montenegro.
         A tenderer shall notify a procuring entity with no delay of any changes
concerning the information referred to in paragraph 1 of this Article no later than five
days after such changes have occurred; the notification shall be in writing and shall be
documented in the manner prescribed.
         A tenderer shall designate in the tender whether the tender relates to the entire
procurement or to selected lots.
         A tenderer shall confirm explicitly in the tender that he accepts the conditions
referred to in Article 45, paragraph 1 item 4 of this Law, and to state whether the tender
refers to the procurement in its entirety or only to particular lots thereof. If a tenderer
submits a tender referring to all lots, the tender must be submitted in such a way that it
may be evaluated separately for each lot.

        Professional References and the Confidentiality of the Data Obtained
                                       Article 47
       If a procuring entity requests the submission of professional references, it shall
specify expressly in the contract notice or in the invitation to tender and in the tender
documents which professional references the tenderers provide.


                                                                                           17
        A procuring entity shall consistently respect the legitimate interests of tenderers,
protecting their technical or trade secrets.
        A procuring entity may use the information obtained only for the purpose of the
particular public procurement.
        The tenderer shall be responsible for the authenticity of the professional
references referred to in paragraph 1 of this Article.

                                   Tenderer’s Statement
                                        Article 48
        If the authorized body of the state or the republic where tenderer’s legal
residence is located does not issue the certificate referred to in Article 46, paragraph 1
item 2 of this Law, the tenderer may submit a written statement instead, certified by the
authorized body of the state or republic where his legal residence is located, given under
the criminal and material liability.

                             8. Recognition of Qualifications
                                Qualification Establishment
                                         Article 49
        Before entering into public procurement contract, a procuring entity shall check
whether the tenderer fulfils the conditions concerning his business and financial
capacity stipulated in Article 45, paragraph 3 item 5 of this Law.
        A procuring entity shall enter into public procurement contract observing the
conditions for establishing qualifications relating to financial, personnel and technical
capacity of the tenderer to perform the contract.
        A procuring entity may define additional conditions for establishing tenderer’s
qualifications, provided these do not discriminate against individual tenderers.

                      Subcontractors’ Qualification Establishment
                                         Article 50
       When establishing the qualifications for contract performance, a procuring entity
may request that the tenderer should state in the tender whether he will entrust the
execution of the contract in question, in its entirety or partially, to a subcontractor.
       If the tenderer intends to entrust the execution of the contract to a subcontractor,
he shall state the name of the subcontractor; if the contract is concluded, the
subcontractor shall be named in the contract between the procuring entity and the
tenderer.
       The tenderer shall be fully liable to the procuring entity for the contract
performance irrespective of the number of subcontractors.
       The tenderer shall allow a procuring entity, upon the latter’s request, access to
the subcontractor for the purpose of establishing the subcontractor’s qualifications.

                              Submission of a Joint Tender
                                        Article 51
        A tender may be submitted by a group of tenderers.
        In the case referred to in paragraph 1 of this Article, a procuring entity may not
request a group of tenderers to associate themselves into a legal entity so that they may
submit a joint tender.
        A procuring entity may require a group of tenderers to submit a legal act binding
them to jointly perform the contract in question if it is awarded to them, provided that
such a request is necessary for successful contract performance.


                                                                                         18
        The legal act referred to in paragraph 3 of this Article shall specify the
responsibility of each tenderer for the contract performance.
The tenderers forming a group of tenderers shall bear unlimited joint liability towards
the procuring entity.
        A procuring entity may request legal entities to state in their tenders or requests
for participation the names and adequate professional qualifications of the persons who
will be responsible for contract performance.
                                  Selection of Candidates
                                         Article 52
        In the first phase of the restricted procedure, a procuring entity shall select the
tenderers that will be invited as candidates in the second phase to submit their tenders.
        Paragraph 2 - Deleted.
        The tenderers shall prove the fulfillment of the conditions referred to in
paragraph 2 of this Article in the manner prescribed in Article 46 of this Law.

                             Compiling a list of candidates
                                        Article 53
        A procuring entity shall compile a list of candidates and determine the period
during which their qualifications will be recognized, the period may not exceed three
years.
        A procuring entity selecting a tenderer by negotiated procedure on account of
not having received correct or acceptable tenders, shall include all the tenderers who
have previously participated in the unsuccessful open or restricted procedure whose
qualifications have been recognized on the basis of Article 52 of this Law and who have
submitted correct tenders; a procuring entity shall publish a contract notice stating that it
will award the contract by the negotiated procedure.

                          9. Criteria for Selecting the Best Tender
                                   Determining the criteria
                                           Article 54
        A procuring entity shall publish in the contract notice and tender documents
identical criteria for selecting the best tender.
        The criteria on the basis of which a procuring entity will select the best tender
have to be described and evaluated in tender documents; criteria must not be
discriminatory and have to be logically connected with the
subject of public procurement.
        In the tender documents the procuring entity shall state, describe and evaluate in
advance all the criteria that it intends to apply.
        A procuring entity may not alter the criteria after the publication of the contract
notice or after the dispatch of a written invitation for submitting tenders in the restricted
procedure.
        When evaluating the tenders, a procuring entity shall apply only the criteria
contained in tender documents, in the manner in which they have been described and
evaluated.

                                     Types of Criteria
                                        Article 55
       The criteria for evaluating the tenders shall be:
       1) the economically most advantageous tender and
       2) the lowest price offered.


                                                                                          19
        The economically most advantageous tender shall be the tender based on
different criteria, depending on the subject of public procurement, especially including:
        1) delivery period or period of completion of services or works;
        2) running costs;
        3) cost effectiveness;
        4) quality and the application of adequate systems of quality analysis/control;
        5) aesthetic and functional characteristics;
        6) technical and technological advantages;
        7) after-sale service and technical assistance;
        8) guarantee period, the type and quality of guarantees and the guaranteed
values;
        9) liabilities concerning spare parts;
        10) post-guarantee maintenance;
        11) price offered;
        12) the possibility of typification and unification;
        13) the extent to which the subcontractors are engaged, etc.
        To each of the elements referred to in paragraph 2 of this Article a procuring
entity shall assign relative (weighted) significance in such a way that the sum total of
weighted points amounts to 100.
        Tender selection based on the economically most advantageous tender criterion,
a procuring entity shall apply by ranking the tenders on the basis of the criteria and the
points assigned to those criteria.
        In the event of the application of the economically most advantageous tender
criterion, in a situation where there exist tenders by domestic and foreign tenderers who
perform works or render services, or offer goods of wholly domestic origin, the
procuring entity shall select the most advantageous domestic tenderer, provided the
relative (weighted) significance final sum difference between the most advantageous
domestic tenderer and the most advantageous foreign tenderer is not more than 20 in
favour of the foreign tenderer.
        Tender selection based on the lowest price offered shall be based on the lowest
price as the sole criterion if all the requirements contained in tender documents have
been complied with.
        In the event of the application of the lowest price criterion, in a situation where
there exist tenders by domestic and foreign tenderers who perform works or render
services, or offer goods of wholly domestic origin, the procuring entity shall select the
domestic tenderer who offered the lowest price, provide that the tendered price is not
more than 20% higher than the lowest price offered by a foreign tenderer.
        If the lowest price offered criterion applies, a procuring entity may not accept
any price increase following the conclusion of the contract.
        The Minister of Finance shall specify the proof of evidence on meeting
conditions specified in paras. 5 and 7 of this article within eight days of coming into
force of this Act.

                                     Variant Tenders
                                         Article 56
       If the criterion for awarding public procurement contract is the economically
most advantageous tender, a procuring entity may take into consideration variant
tenders submitted by the tenderers fulfilling the minimum requirements concerning
procuring entity’s technical specifications.



                                                                                        20
        A procuring entity shall state in tender documents the minimum technical
requirements that have to be observed in variant tenders, as well as special requirements
for presenting such tenders.
        If variant tenders are not allowed, a procuring entity shall point this out in the
contract notice and in tender documents.
        A procuring entity may not reject the variants proposed solely on the ground that
the variant tender in question was compiled on the basis of technical specifications
drawn up according to the national technical specifications recognized as compliant to
the essential requirements.
                                   Abnormally Low Price
                                         Article 57
        If for a public procurement contract tender prices appear to be abnormally low, a
procuring entity shall, before rejecting such tender, shall demand a detailed written
explanation of all tender’s constituent elements it considers relevant, in particular those
concerning the economy of the construction method, production or the selected
technical solutions and exceptionally
favorable circumstances that are available to the tenderer for contract performance, or
pertaining to the originality of the products and work proposed by the tenderer.
        In the case referred to in paragraph 1 of this Article, a procuring entity shall give
the tenderer a sufficient period of time to reply; this period may not exceed 20 days
from the day of submission of such a request.
        Having received the requested explanation, a procuring entity shall check the
constituent elements of the tender referred to in paragraph 1 of this Article.

             Additional Explanations, Control and Acceptable Corrections
                                          Article 58
        A procuring entity may request additional explanations from tenderers that will
help him in the course of examining, evaluating and comparing tenders; he may also
exert control of the tenderer or the latter’s subcontractor.
        A procuring entity may not demand, allow or offer any alterations to the content
of a tender, including a change of price; in particular, a procuring entity may not
demand, allow or offer such a change that would turn an incorrect tender into an correct
one.
        A procuring entity may, subject to the tenderer’s consent, correct only technical
errors noticed in the course
of examining the tender after the opening of tenders.
        A procuring entity may demand from a tenderer to forward data on his business
connections relevant to the public procurement contract in question.
        If the value of the public procurement contract to be awarded exceeds
300.000.000 dinars, a tenderer shall submit to the procuring entity his tender along with
a copy of the tender, in two separate envelopes.
        The tenderer shall guarantee that the tender and its copy are identical.
        A tender shall be opened according to the provisions of this Law, whereas its
copy shall be forwarded simultaneously and directly to the Commission for the
Protection of Rights, unopened.
        If no request for the protection of the tenderer’s rights is lodged, the copy
deposited with the Commission shall be returned to the tenderer immediately after the
expiry of the period for lodging requests for the protection of the tenderers’ rights.




                                                                                          21
       If a tenderer lodges a request for the protection of his rights, the copy deposited
with the Commission shall be returned to the tenderer immediately after the review
procedure is terminated.

        10. Time Limits in Public Procurement Contracts Award Procedure
                            Time Limit for Tenders Submission
                                          Article 59
        A procuring entity shall set a deadline for tender submission in the contract
notice and in tender documents.
        The time limit for tenders submission set in the contract notice has to be
identical to the time limit set in tender documents.
        Setting the time limit referred to in paragraph 2 of this Article shall mean setting
the date and the hour by which the tenders may be submitted.
        After the expiry of the time limit for tenders submission, a tenderer may not
withdraw his tender or make alterations to it; if he does so or if he does not sign a
contract after his tender has been selected, the procuring entity shall be authorized to
cash the guarantee submitted alongside the tender.
        A tenderer shall submit his tender in person or by post.

                               Calculation of Time Limits
                                         Article 60
        The time limit for tenders submission shall be calculated counting from the day
of publishing of the contract notice in “The Official Gazette of the Republic of Serbia”.

                                      Timely Tender
                                         Article 61
        A tender shall be deemed timely if it has been received by the procuring entity
by the date and the hour specified in the contract notice or invitation to submit tenders.
         Upon the receipt of a tender, a procuring entity shall mark the date and the hour
of the receipt and issue, on the tenderer’s request, a certificate of receipt.
        If a tender has been submitted after the date and the hour specified in the
contract notice, it shall be considered untimely, and a procuring entity shall return it to
the tenderer unopened after the procedure of opening the tenders is terminated, with a
note stating that it has been submitted in an untimely manner.

                     Fixing the Time Limit for Tenders Submission
                                         Article 62
        The time limit for tenders submission shall be adequate to the period needed for
the preparation of a correct tender.
        If tender documents or the technical specifications to be examined are
voluminous, or if it is necessary to visit the location and the like, a procuring entity shall
envisage the possibility of extending the deadline.

       The General Time Limit for Tenders Submission in the Open Procedure
                                     Article 63
       The time limit for tenders submission in the open procedure shall not be less
than 40 days from the day of the publication of the contract notice in “The Official
Gazette of the Republic of Serbia”.

         Reduced Time Limit for Tenders Submission in the Open Procedure


                                                                                           22
                                          Article 64
        The time limit for tenders submission may be less than the term referred to in
Article 63 of this Law, but it shall not be less than 30 days.
        The time limit for tenders submission in the open procedure may be less than the
term referred to in paragraph 1 of this Article, but it shall not be less than 22 days from
the day of publishing the contract notice if a procuring entity, according to the
provisions of Article 69 of this Law:
        1) has previously published a prior indicative notice on the prescribed form
stating his intention to award a public procurement contract;
        2) has issued the notice at least 52 days and no longer than 12 months before the
publication of the contract notice;
        3) has included in the previously issued notice at least as much information as he
had at the moment of issuing the notice.

    The Time Limit for Submission of Applications to Participate in the Restricted
                     Procedure and in the Negotiated Procedure
                                      Article 65
       The time limit for submission of applications to participate in the restricted
procedure and in the negotiated procedure with prior publication shall not be less than
25 days from the date of the publication of the invitation in the Official Gazette of the
Republic of Serbia.

 Setting the General Time Limit for Tenders Submission in the Restricted Procedure
                                       Article 66
       The time limit for tenders submission in the restricted procedure shall not be less
than 30 days from the date of dispatch of the written invitation by the procuring entity.

        Reduced Time Limit for Tenders Submission in the Restricted Procedure
                                          Article 67
        The time limit for tenders submission in the restricted procedure may be less
than the term referred to in Article 66 of this Law, but it shall not be less than 26 days
from the day of dispatch of the written invitation if a procuring entity:
        1) has previously issued a prior indicative notice on the prescribed form, stating
his intention to award a public procurement contract;
        2) has issued the notice at least 52 days and no longer than 12 months before the
publication of the contract notice;
        3) has included in the previously issued notice at least as much information as
was available at the time of issuing the notice.
        The application to participate in contract award procedure may be sent by letter,
telegram, telex, telefax or electronic mail; it may also be announced by telephone.
        If the application has been sent by telegram, telex, fax, electronic mail, or if it
has been announced by telephone, it has to be confirmed by letter, which is to be
submitted within the period of time set for tenders submission.

  Conditions for Additional Reducing of the Time Limits in the Restricted Procedure
                                          Article 68
        If, in a restricted procedure for urgency reasons, it is not possible to observe the
time limits referred to in Articles. 65, 66 and 67 of this Law, a procuring entity may set
the following deadlines:



                                                                                         23
        1) the ultimate deadline for submission of applications to participate in the
procedure shall not be less than 15 days from the date of publication of the contract
notice in the Official Gazette of the Republic of Serbia.
        2) the ultimate deadline for tenders submission shall not be less than 10 days
from the date of dispatch by the procuring entity of the written invitation.
        If a candidate has requested additional information relating to the tender
documents in a timely manner, the procuring entity shall forward that information not
later than four days before the expiry of the period for tenders submission.

                     11. Publication of Public Procurement Notices
                     The Method of Public Procurement Publication
                                         Article 69
        All public procurement notices shall be published in the Official Gazette of the
Republic of Serbia, and, where the value of the public procurement exceeds a sum of
3,000,000 dinars for goods and services or 15,000,000 dinars for works, also in one
daily newspaper distributed on the entire territory of the Republic.
        All public procurement notices shall be published in the Official Gazette of the
Republic of Serbia not later than 15 days following the date of the receipt of the
procuring entity's request for publication.
        Public procurement notices shall also be published on the web site of the Office,
according to the Office’s decision.
        Public procurement notices referred to in paragraph 3 of this Article shall be
published in the Serbian language and in a language commonly used in the international
commerce.

                                       Types of Notices
                                           Article 70
         The types of notices used shall be:
         1) prior indicative notice;
         2) public invitation;
         3) public invitation for establishing tenderers’s qualifications;
         4) notice on public procurement contracts awarded and
         5) periodic information notice.
        In the restricted procedure, a procuring entity shall publish the public invitation
for establishing tenderers qualification, and in the second phase it shall invite candidates
to submit their tenders.
         A public invitation for establishing tenderers qualification and periodic
information notice shall be published only in the cases of public procurement in the
water, energy, telecommunications and transport sectors.

                                  Prior Indicative Notice
                                         Article 71
         In the case of scheduled public procurement whose approximate value exceeds
50.000.000 dinars, a procuring entity shall publish, at least once a year, a prior notice
indicating the intention to award a public procurement contract.
         In the case of public procurement in the water, energy, telecommunications and
transport sectors, the prior indicative notice shall be published, not later than 12 months
before the date of dispatch of invitation to participate by a procuring entity in the
restricted procedure or in the negotiated procedure; whereby a procuring entity shall
observe the time limits fixed for tenders submission prescribed by this Law.


                                                                                         24
                                        Public Invitation
                                            Article 72
         A procuring entity shall publish a public invitation:
         1) in the case of public procurement contract to be awarded by open procedure;
         2) in the first phase of the restricted procedure and
         3) in the case of public procurement contract to be awarded by negotiated
procedure with prior publication.
         A public invitation shall contain information on the procuring entity, the subject
of procurement, participation conditions, criteria, the time and the place of gaining
insight into tender documents, the time and the place for tenders submission, the
approximate date of passing the decision on awarding of public procurement contract,
as well as the name of the contact person providing additional information.
         A public invitation may contain other data necessary for providing information
to the tenderers.

  A Public Invitation for Establishing Tenderers Qualification and the Content of the
                                   Invitation for Tenders
                          Submission in the Restricted Procedure
                                          Article 73
        In the restricted procedure, a procuring entity shall select the most favourable
tender after the qualification procedure carried out in the first phase.
        In the case of the qualification procedure, a procuring entity shall ensure that
tenderers may request at any time for their qualifications for participation in the contract
award procedure to be established.
       Paragraph 3 - Deleted.
        A public invitation for the purpose of establishing the tenderers qualification in
the qualification procedure shall contain following information:
        1) name and address of a procuring entity, including the telephone, telefax and
telex number, as well as the
e-mail address;
        2) the purpose of the qualification procedure;
        3) the address for obtaining information concerning participation in the
qualification procedure;
        4) the time limit for submission of the request to participate;
        5) the duration of the qualification procedure if estimation possible.
        If a procuring entity estimates that the process of decision making will last more
than six months from the date of submission of requests to participate, he shall notify
the applicants, within two months of the date of submission of the requests, of the
reasons for extending the decision making period and of the date when the decision will
be passed.
        The qualification procedure may encompass several phases, and has to be based
on non-discriminatory criteria and conditions, established by a procuring entity in
advance.
        A procuring entity may, if need be, update the criteria and conditions referred to
in paragraph 6 of this Article.
        Upon the request of any interested supplier and services provider, the criteria
and conditions referred to in paragraph 6 of this Article shall be made accessible, and a
procuring entity shall inform the interested parties of any update.



                                                                                         25
        If a procuring entity thinks that its qualifications system meets the requirements
of other procuring entities as well, it shall furnish the names of these procuring entities
to the interested suppliers and services providers.
        A procuring entity shall apply the qualification procedure for awarding public
procurement contracts in the water, energy, telecommunications and transport sectors.
        A procuring entity shall invite simultaneously and in writing the selected
candidates to submit their tenders.
        The invitation shall contain especially the following information:
        1) address where the candidate may request tender documents and additional
documentation, the time limit for making such a request, the amount and payment terms
for tender documents;
        2) the time limit for receipt of tenders, the address to which the tenders must be
sent and the language in which tenders must be drawn up ;
        3) tenderer’s references in the field related to the public procurement in
question;
        4) the list of documents to be submitted to support the statements made by the
candidates pertaining to the fulfillment of the participation conditions or supplying
additional data to prove the candidates’ financial and economic standing and the ability
to perform the contract that is the subject of the invitation;
        5) the date of opening the tenders.

                     Notice on Pubic Procurement Contract Award
                                        Article 74
       A procuring entity shall forward to the Official Gazette of the Republic of Serbia
the notice on the award of a public procurement contract, regardless of the type of
procedure, not later than 14 days of the date of conclusion of the contract.

                                 Periodic Information Notice
                                          Article 75
        Periodic information notice relates to the goods, works or services that are the
subject of public procurement to be awarded by the restricted procedure or by the
negotiated procedure by which all interested tenderers are invited to express their
interest to participate in writing.
        In the notice referred to in paragraph 1 of this Article, it shall be stated that the
contract will be awarded by restricted procedure or by negotiated procedure, without
any subsequent publication of a public invitation, and interested tenderers are invited to
express their interest to participate in writing.
        Before initiating the process of selecting the tenderers or participants in the
negotiated procedure, a procuring entity shall invite all the candidates to confirm their
interest to participate in the public procurement procedure.

                                12. The Opening of Tenders
                                 Public Opening of Tenders
                                          Article 76
         The opening of tenders in the open procedure and in the second phase of the
restricted procedure shall be public.
         Exceptionally, a procuring entity may for the purpose of protecting a trade,
official, military or state secret decide not to open the tenders in public.
         A procuring entity shall state the decision referred to in paragraph 2 of this
Article when publishing the public procurement procedure.


                                                                                          26
                           Minutes of the Opening of Tenders
                                       Article 77
       A procuring entity shall take minutes of the opening of tenders procedure,
whereby the following data in particular shall be recorded:
       1) tender registry number;
       2) tenderer’s name, or code name if the tender is anonymous;
       3) tender price and any discounts offered by a tenderer.
       A procuring entity shall ensure the safeguard of the tenderer’s trade secrets.
       The Minister of Finance and Economy shall determine more closely the
procedure of opening of tenders in the open procedure, the restricted procedure and the
negotiated procedure; he shall also prescribe the form for taking minutes of the opening
of tenders.

                  Forwarding the Minutes of the Opening of Tenders
                                        Article 78
       A procuring entity shall forward the minutes of the opening of tenders to
tenderers within three days of the termination of the opening of tenders procedure.

                        13. Public Procurement Contract Award
                Correct Tender, Adequate Tender and Acceptable Tender
                                         Article 79
        A procuring entity shall select the best tenderer if it has received at least two
independent correct tenders from two different tenderers that are not associated entities,
pursuant to the provisions of the law regulating the taxation of company profit, or the
law regulating the taxation of citizens’ income.
        Where the value of the public procurement does not exceed the sum of
3,000,000 dinars for goods and services or 15,000,000 dinars for works, a procuring
entity may award a public procurement contract even when receiving only one tender
which is correct, adequate and acceptable.
        Having examined and evaluated the tenders in the procedure of awarding a
public procurement contract, a procuring entity shall reject all the incorrect tenders, and
he may also reject inadequate and unacceptable tenders.
        If he has received only inadequate or only unacceptable tenders, a procuring
entity may continue the procedure of awarding a public procurement contract according
to the provisions of Article 23 of this Law.
        A procuring entity may request tenderers or candidates to submit additional
proofs of fulfilling the conditions, not later than 20 day, but only in the case when the
tenderers or candidates have been unable to obtain the documents required on account
of the fact that they are not issued under the regulations of the state where the tenderer’s
or the candidate’s legal residence is located or according to the regulations of the
Republic of Montenegro.
        In the case referred to in paragraph 5 of this Article, a procuring entity shall state
which documents or additional proofs have to be submitted

                                 Rejection of all Tenders
                                        Article 80
       A procuring entity shall provide a written explanation when deciding to reject all
tenders, specifying the reasons for rejection.



                                                                                           27
        A procuring entity shall publish the decision referred to in paragraph 1 of this
Article in “The Official Gazette of the Republic of Serbia”.

                     Report on Public Procurement Contract Award
                                         Article 81
        A procuring entity shall draw up a written report on each public procurement
contract that has been awarded.
        The report referred to in paragraph 1 of this Article shall contain in particular the
following information:
        1) the name and address of the procuring entity;
        2) the subject and value of the public procurement contract;
        3) the names of the tenderers whose tenders have been rejected and the reasons
for rejection;
        4) the name of the successful tenderer and the reasons for selecting his tender; if
the tenderer has stated that the contract will be carried out with the help of a
subcontractor, each part of the contract to be executed by the subcontractor shall be
specified;
        5) if the negotiated procedure has been applied – the circumstances justifying the
application of this procedure.

             Justified notification of awarding a public procurement contract
                                          Article 82
         On the basis of the report referred to in Article 81 of this Law, a procuring entity
shall immediately notify tenderers of the public procurement contract award.
         A tenderer who has not been selected may request in writing a contract award
notice with an explanation within eight days of having received the notification referred
to in paragraph 1 of this Article.
         A procuring entity shall forward the notice on contract award with an
explanation referred to in paragraph 2 of this Article within 15 days of having received
the request in writing.
         The explanation referred to in paragraph 2 of this Article shall contain the
following information:
         1) the reasons for rejecting the tender of the applicant referred to in paragraph 2
of this Article;
         2) the names of the tenderers meeting the required selection and award criteria;
         3) the advantages of the selected tender from the point of view of meeting the
criteria;
         4) the name of the tenderer whose tender has been selected.
         A procuring entity may refuse to provide a written explanation, in full or in part,
if disclosing such information would be in collision with the regulations or if it would
be contrary to the public interest in some other way, or if it would violate a trade secret
of the selected tenderer, and also if the explanation would contain information
designated as classified on the basis of other regulations, or if the data thus imparted
might adversely affect fair competition among the tenderers or other parties in the
procedure.
         If the tenderer whose tender has been selected does not sign a public
procurement contract, the procuring entity may conclude a contract with the next most
favorable tenderer.

                        Refusal of the Request for Qualification


                                                                                          28
                                       Article 83
        A procuring entity shall notify the candidates whose requests for qualification
have been rejected of the reasons for rejection, which can be based solely on the
qualification conditions.
        A procuring entity shall keep the written reports on the qualified tenderers,
classified according to the type of public procurement, according to the regulations
relating to the documentary materials and archives.

               Exclusion of Candidates from the List of Qualified Tenderers
                                          Article 84
         A procuring entity may exclude a candidate from the list of qualified tenderers
only for reasons based on conditions determined in advance.
         A procuring entity shall inform the tenderer of the reasons for exclusion from
the list referred to in paragraph 1 of this Article.


    IV. THE SUBJECT OF A PUBLIC PROCUREMENT CONTRACT AND
             SPECIAL CASES OF AWARDING A CONTRACT

                                1. Procurement of Goods
                 Definition of the Subject of a Public Supply Contract
                                       Article 85
       The subject of a public supply contract may be:
       1) the purchase of goods (to be paid in a lump sum or in installments);
       2) the renting of goods;
       3) the leasing of goods (with or without the right of purchase).

                                   Attendant Services
                                        Article 86
       A public procurement contract may include services if the services are
necessarily linked to the supply of goods (assembly, transport, insurance or other
services defined by the procuring entity).

                                   Additional Deliveries
                                          Article 87
        A procuring entity may award a public procurement contract by the negotiated
procedure without a prior publication in the case of additional deliveries by the original
supplier intended for:
        1) partial replacement of products, materials or installations or,
        2) the extension of the range of existing products, materials or installations,
which would impose upon the procuring entity the obligation to procure materials of
different technical characteristics if the supplier or theprovider of services was changed,
causing great technical difficulties in operations and maintenance.
        The total value of additional deliveries referred to in paragraph 1 of this Article
may not exceed 25% of the total value of the main public procurement contract.

                                  Other Deliveries
                                     Article 88
       A procuring entity may award a public procurement contract by the negotiated
procedure without a prior announcement in the case of procuring goods intended solely


                                                                                        29
for the purpose of research, experimentation, study or development, and not for any
commercial purposes or recover research and development costs.

                                 2. Procurement of Works
                   Definition of the Subject of a Public Works Contract
                                         Article 89
         The subject of a public works contract shall be:
         1) the execution of work assignments;
         2) the design and execution of work assignments linked to the specific activities
listed in Annex II, forming
an integral part of this Law;
         3) civil work on an object taken as a whole which meets all the economic and
technical requirements of the procuring entity.

                                Prior Information Notice
                                        Article 90
        If the estimated value of works exceeds 50.000.000 dinars, a procuring entity
shall issue a prior information notice of the works immediately after the passing of the
law regulating the annual Republic Budget.

                              Subsidized Construction Work
                                         Article 91
         The provisions of this Law shall also apply to awarding public works contracts
for which the investor has received a subsidy from a direct or an indirect budget user, or
from an organization of compulsory social insurance, if the subsidy exceeds 50% of the
value of the public works contract.
         The provisions of paragraph 1 of this Article shall apply to public procurement
related to the construction of hospitals, sports and recreation facilities and holiday
facilities, school and university buildings and buildings used by state bodies, as well as
civil engineering construction work, according to Annex II of this Law.

                                      Additional Works
                                          Article 92
        A procuring entity may award a public procurement contract of work by the
negotiated procedure without prior publication in the following cases:
        1) in the case of additional works or services that were not included in the
project initially assigned or in the original public procurement contract, and which have,
due to unforeseeable circumstances, become necessary for the execution of the public
works contract, provided the contract is awarded to the initial contractor or provider of
services, and if:
        (à) such additional works or services cannot be separated, in technical or
economic terms, from the principal public procurement contract without causing
insurmountable difficulties to the procuring entity;
        (b) or if such works or services, which a procuring entity could assign separately
from the execution of the initial contract, are necessary for the further phases of the
execution of the works in question, provided that the total value of all additional works
or services cannot exceed 25% of the total value of the principal public procurement
contract;
        2) in the case of such new services or works representing a repetition of similar
works or services, and are executed by the initial contractor, provided that such works


                                                                                       30
or services comply with the initial project, for which the initial public procurement
contract was awarded following the publication of a public invitation. A procuring
entity shall mention such a possibility in the initial publication of the public invitation.
        A procuring entity may award a public works contract by the negotiated
procedure without prior publication referred to in paragraph 1 item 2 of this Article if
less than three years have elapsed since the conclusion of the first contract.

                                      Other Works
                                       Article 93
       A procuring entity may award a contract by the negotiated procedure without
prior publication, involving a construction work solely for the purpose of research,
development or experimentation, and not intended for any commercial purposes of a
procuring entity or for the reimbursement of the research and development costs.

                   Meeting Special Requirements for Contract Award
                                        Article 94
         A procuring entity may name in tender documents, the body authorized to
provide the necessary information concerning the obligations to be fulfilled in order to
meet the requirements of the regulations dealing with safety measures at work,
employment and working conditions currently in effect.
         In the case referred to in paragraph 1 of this Article, a procuring entity shall
request the tenderers or candidates to explicitly state in their tenders that they have
observed the obligations resulting from the regulations dealing with safety measures at
work, employment and working conditions currently in effect.
         A procuring entity shall in particular verify the fulfillment of the obligations
resulting from the regulations dealing with safety measures at work, employment and
working conditions currently in effect if the abnormally low price offered results from a
failure to observe these regulations.

                               List of Interested Contractors
                                           Article 95
        Based on a public invitation, the Chamber of Commerce of the Republic of
Serbia (hereinafter referred to as: the Chamber) shall compile a list of interested
contractors in the field of construction work, adhering to the mandatory conditions for
participating in a public procurement procedure'and the regulations dealing with
construction work in the Republic.
        If FR Yugoslavia has concluded an agreement with another state, contractors
whose legal residence is located in other states will be included in the list, provided that
they meet the requirements referred to in paragraph 1 of this Article.
        Contractors whose legal residence is located in the Republic of Montenegro will
be included in the list, provided that they meet the requirements referred to in paragraph
1 of this Article.
        If the Chamber receives information to the effect that a contractor included in
the list of interested contractors does not fulfill the requirements referred to in
paragraphs 1 and 2 of this Article, it shall send a written request to the contractor in
question, demanding that he should prove again, within eight days of having received
the request in writing, that he fulfils the said requirements.
        If the contractor referred to in paragraph 4 of this Article fails to provide
evidence of fulfilling the requirements referred to in paragraphs 1 and 2 of this Article,
the Chamber shall erase his name from the list of interested contractors.


                                                                                         31
       For each public procurement procedure they participate in, the contractors shall
submit a certificate of being included in the list issued by the Chamber.

  Statement given by a Tenderer or a Candidate on Meeting the Obligations towards
                             Employees and Subcontractors
                                        Article 96
        For each public procurement contract a procuring entity shall demand a tenderer
or a candidate to submit a statement to the effect that he meets the minimum
requirements of the collective agreement or some other corresponding legal act in an
orderly manner, and that he fulfils the obligations he has towards the subcontractors
regularly and in a timely manner.
        A procuring entity may impose special conditions concerning the fulfillment of
obligations on the part of the contractor towards his subcontractors, and the tenderer
shall expressly accept those conditions.

                               3. Procurement of Services
                 Definition of the Subject of a Public Services Contract
                                        Article 97
        The subject of a public services contract shall be the services listed in Annexes I
A and I B, forming an integral part of this Law.
        Public procurement of services directly subsidized from the budget where the
amount of the subsidy exceeds 50% of the value of the contract and where a procuring
entity is not a direct budget user shall be awarded according to the provisions of this
Law.

                               Services not Subject to this Law
                                           Article 98
         The provisions of this Law shall not apply to:
         1) the services referred to in Article 2 of this Law;
         2) financial services (credit, loan) related to acquisition or rental of land, existing
buildings or other immovable property, or concerning rights thereon, whatever form the
contract on financial services is concluded, whether it is concluded at the same time,
before or after the contract of acquisition or rental of land;
         3) contracts for the acquisition, development, production or co-production of
radio or television programme material and contracts for broadcasting time;
         4) services of voice telephony, telex, radio-telephony, internet and satellite
services;
         5) arbitration and conciliation services;
         6) contacts for financial services in connection with the issue, sale, purchase or
transfer of securities or other financial instruments;
         7) the services of the National Bank of Serbia;
         8) employment contracts, written decisions on employment, temporary service
contracts, and
         9) research and development service contracts other than those where the
benefits accrue exclusively to A procuring entity for its use in the conduct of its own
affairs, on condition that the service provided is wholly remunerated by A procuring
entity.

                 Award of Public Services Contract by a Design Contest
                                      Article 99


                                                                                             32
        A procuring entity shall award a public service contract by means of a design
contest in the field of urban planning, architecture, civil engineering, engineering,
design and information technology.
        A draft, plan or design shall be selected by an independent jury.
        The jury referred to in paragraph 2 of this Article shall be composed exclusively
of natural persons who are not in any way connected with the participants in the contest.
        If a procuring entity demands from participants in à contest particular
professional qualifications or experience, at least a third of the members of the jury
must have the same qualifications or experience.
        The jury shall be autonomous in its decisions, and the participants in the contest
shall be anonymous.
        The decision of the jury shall be based solely on the criteria referred to in Article
55 of this Law.

                                     Additional Services
                                          Article 100
        A procuring entity may award a public procurement contract of services by the
negotiated procedure without prior publication:
        1) in the case of additional services or work not included in the initially assigned
project or in the initial public procurement contract, which, due to unforeseeable
circumstances, have become necessary for the execution of the public procurement
contract in question, provided that the contract be awarded to the initial services
provider or contractor, and if:
        (à) such additional services or works cannot be separated, in technical or
economic terms, from the principal public procurement contract without causing
insurmountable difficulties for the procuring entity, or
        (b) if such services or works, although the procuring entity could award them
separately from the execution of the initial contract, are necessary for the subsequent
phases of the work in question; the total estimated value of these additional services or
works may not exceed 25% of the total value of the principal public procurement
contract;
        2) in the case of new services and works that represent a repetition of similar
services or work executed by the initial contractor, on the condition that such services or
work fit into the principal project, for which the initial public procurement contract was
awarded following the publication of a public invitation. A procuring entity shall
mention this possibility in the initial publication of a public invitation. A procuring
entity may award a public services contract by the negotiated procedure without the
prior publication referred to above only if less than three years have elapsed since the
conclusion of the first contract;
        3) when a public services contract is to be awarded by design contest referred to
in Article 99 of this Law, and if it is to be awarded to one successful candidate or one of
several successful candidates. If there are several successful candidates, a procuring
entity shall invite each one of them for negotiations.

                               Award of Consulting Services
                                        Article 101
         A contract of consulting services (the services referred to in items 9-11 of Annex
I A and the services referred to in items 21-22 of Annex I B) shall be awarded by the
restricted procedure.



                                                                                          33
        In the first phase, a procuring entity shall recognize the qualifications to a certain
number of candidates on the basis of ability and professional experience in connection
with the services that are the subject of public procurement.
        Under exceptional circumstances, contrary to the provisions of paragraph 2 of
this Article, with regard to the nature of the consulting services that are the subject of
public procurement, a procuring entity may request in the public invitation potential
tenderers to express their interest.
        The public invitation referred to in paragraphs 2 and 3 of this Article shall
contain information about:
        1) the name and address of a procuring entity, including the telephone, telefax
and telex number and the email address;
        2) the purpose of the qualification procedure;
        3) the address where information concerning participation in the qualification
procedure may be obtained;
        4) the time limit for submission of a request for participation;
        5) the duration of the qualification procedure, if it is possible to estimate it;
        6) the consulting service that is the subject of public procurement;
        7) the manner of obtaining the pre-qualification documentation;
        8) the amount of the expenses incurred for the copying and forwarding the pre-
qualification documents that should be covered.
        In the second phase, a procuring entity shall invite all the candidates whose
qualifications have been recognized or the tenderers who have expressed their interest in
submitting a tender.

                                        Article 102
        A procuring entity may, subject to the prior approval of the Office, forward an
invitation for submission of tenders for consulting services directly to the tenderers if:
        1) the consulting service that is the subject of public procurement may be
obtained only from a limited number of tenderers, in which case the invitation for
tenders submission may be forwarded to all such tenderers;
        2) the time and the expenses necessary for evaluating a great number of
proposals would not be commensurate with the value of the service that is the subject of
public procurement, on the condition that the invitation for tenders submission has been
forwarded to a sufficient number of tenderers to ensure effective competition.
        In addition to the elements referred to in Article 52, paragraph 2 of this Law, an
invitation for tenders submission for consulting services shall contain a statement
concerning the relative (weighted) significance of the criteria that will be applied for the
evaluation of the tenders.
        A procuring entity shall base the criteria referred to in paragraph 2 of this Article
on:
        1) the qualifications, experience, reputation, reliability and professional and
managerial ability of the tenderer and the staff to be involved in providing the service in
question;
        2) the extent the tender in question meets the needs of a procuring entity;
        3) the price offered, including potential side expenses and attendant expenses;
        4) - Deleted;
        4) the scope of the participation of domestic participants and how this will boost
employment;
        5) the effects of the transfer of technology and knowledge, and of the
development of managerial and professional skills;


                                                                                           34
        6) other circumstances, depending on the nature of the consulting service in
question.
        To each of the elements from paragraph 3 of this Article a procuring entity shall
assign a relative significance (weight), so that the total sum of weighted points amounts
to 100.
        A procuring entity shall evaluate the tenders submitted by establishing the
minimum requirements that the tenders have to meet in terms of quality and technical
aspects, which shall be obtained by applying the weighted criteria referred to in
paragraph 3 items 1, 2 and 4-6 of this Article; after that it shall rank the tenders on the
basis of these criteria and weighted points.
        After completing the ranking procedure, a procuring entity shall compare the
prices offered in the tenders ranked above the minimum requirements level.
        A tender referred to in paragraph 5 of this Article may be selected:
        1) on the basis of the lowest price offered, or
        2) on the basis of having received the best mark, combining the criteria referred
to in paragraph 2 items 1, 2, 4 and 6 of this Article and the price offered.

                                       Article 103
       - Deleted.

                                       Article 104
       - Deleted.

                  Design Contest as an Integral Part of Another Service
                                        Article 105
        The subject of public procurement under this Law encompasses design contests
that form an integral part of the procedure for awarding public services contract referred
to in:
        1) Annex I B;
        2) Annex I A, with the exception of voice telephony, radio telephony, paging
and satellite services under item 5 of the said Annex.

                        Design Contest as an Independent Service
                                         Article 106
        The subject of a public procurement contract include independent design
contests, involving the award of
prizes and payments to participants in the case of services referred to in:
        1) Annex I B;
        2) Annex I A, other than voice telephony, radio telephony, paging and satellite
services referred to in item 5 of the said Annex.


           V. PUBLIC PROCUREMENTS IN THE WATER, ENERGY,
           TELECOMMUNICATIONS AND TRANSPORT SECTORS

                              The Subject of the Contract
                                       Article 107
       Public procurement contracts in the water, energy, telecommunications and
transport sectors shall encompass the following activities:



                                                                                        35
         1) the supply or operation of permanent networks providing public services in
connection with the production, transport or distribution of: drinking water, electricity,
gas and heat, as well as supplying drinking water, electricity, gas or heat to these
networks;
         2) the exploitation of a specific geographic area for the purpose of exploring or
extracting oil and gas, exploring or digging coal or other solid fuels, as well as
construction, exploitation and maintenance of airports, river ports or other terminals for
air or river transport carriers;
         3) the operation of networks providing public services in the field of railway
transport, automated systems, bus transport or telegraphy. In the case of transport
services, it shall be considered that a network exists if theservice in question is provided
according to the operating conditions (e.g. the maintenance of roads, the availability or
frequency of the service in question) prescribed by the authorized body;
         4) maintenance or operation of public telecommunications networks or provision
of telecommunications services, other than purchase contracts awarded by procuring
entities carrying out such an activity whose sole purpose is to enable them to provide
telecommunications services, provided other organizations may offer their
services in the same area and under the same conditions.

          Awarding a Contract where Special or Exclusive Rights are Granted
                                          Article 108
        If the Republic, a territorially autonomous unit or local government has granted,
through a special law, decree or other regulation, a special or exclusive right to perform
the activities referred to in Article 107 of this Law, the holder of such a right shall be
obligated, when procuring goods, services or works, to act like a procuring entity under
the provisions of this Law.
        Granting a special or exclusive right to perform the activities referred to in
paragraph 1 of this Article shall not encompass granting concessions to a person who is
not a procuring entity under the provisions of this Law.
        The special or exclusive right referred to in paragraph 1 of this Article means
that the holder of such a right may use expropriation for the purpose of building the
networks or facilities referred to in Article 107, and that he may install the equipment
for building a network on, below or above a public road.
        According to the provisions of paragraph 1 of this Article, the right referred to in
Article 100 item 1 of this Law, when its holder provides drinking water, electricity, gas
or heat for a network operated by another person, shall also be considered to be a
special or exclusive right.

                Definition of Exceptions Related to the Subject of Contract
                                          Article 109
        The providing of drinking water, electricity, gas or heat shall not be considered
to be one of the activities referred to in Article 107 of this Law in the following cases:
        1) in the case of providing drinking water or electricity:
        (à) if a person who is not an procuring entity according to the provisions of this
Law draws drinking water or produces electricity, and the consumption of these goods
is necessary for performing activities not specified in Article 107 of this Law;
        (b) if the providing of a public network depends solely on the personal
consumption of a person who is not a procuring entity according to the provisions of
this Law, and if this consumption does not exceed 30% of the total consumption of



                                                                                         36
drinking water or electricity on the part of that person, taking into consideration the
average consumption over the last three years, including the current year;
       2) in the case of providing gas and heat:
       (à) if the production of gas or heat on the part of a person who is not a procuring
entity according to the provisions of this Law is an unavoidable consequence of
performing activities not specified in Article 107 of this Law, and
       (b) if the providing of a public network is intended solely for the purpose of
economic exploitation of such production and does not exceed 20% of the total annual
income of the organization in question, taking into consideration the last three years,
including the current year.

                                 Additional Contracts
                                       Article 110
         The subject of public procurement contracts in the water, energy,
telecommunications and transport sectors may also be procurement:
         1) connected with hydraulic engineering projects, irrigation or land drainage,
provided that the quantity of water intended for water supply exceeds 20% of the total
quantity of water provided through these projects,
irrigation or land drainage;
         2) connected with wastewater treatment or filtration.

    Contracts in the Water, Energy, Telecommunications and Transport Sectors not
                                      Subject to this Law
                                         Article 111
        The provisions of this law shall not apply to public procurement contracts in the
water, energy, telecommunications and transport sectors in the following cases:
        1) when a procuring entity responsible for the supply or operation of public
telecommunications networks, or for providing public telecommunications services
awards a purchase contract relating to the goods whose sole purpose is to enable it to
provide one or more of telecommunications services,
provided that another person may freely offer his services in the same area and under
the same conditions;
        2) when a procuring entity awards a contract for the purpose of purchasing
water;
        3) when a procuring entity awards a contract for the purpose of providing
electricity or providing fuel for energy production;
        4) when a procuring entity transports oil or natural gas through systems where
only one tenderer exists;
        5) in the case of a design contest that a procuring entity awards or organizes for
purposes not specified in Article 107 of this Law;
        6) in the case of services that a procuring entity awards to a mixed company,
established by several procuring entities for the purpose of performing activities in the
following areas:
        (à) the supplying or operation of permanent networks intended for providing
public services in connection with the production, transfer or distribution of drinking
water, electricity, gas or heat, or supplying drinking water, electricity, gas or heat;
        (b) the exploitation of a certain geographic area for the purpose of supplying
airports, river ports or other
terminals for air or river transport;



                                                                                       37
         (c) the operation of networks providing public services in the field of railway
traffic, automated systems, bus traffic and telegraphy. It shall be considered that a traffic
network exists if the service in question is provided according to the operating
conditions (e.g. the maintenance of roads, the availability or frequency of the service in
question) prescribed by the authorized body;
         (d) the supplying or the operation of public telecommunications networks or the
provision of telecommunications services;
         7) services that a procuring entity awards to an affiliated company, provided that
the affiliated company in question has made at least 80% of its average overall income
over the last three years from the services provided in the Republic, for the companies it
is affiliated with;
         8) providing public bus transport services, provided that other persons may
provide those services in the same geographic area under the same conditions.
         Also, the provisions of this Law shall not apply to public procurement contracts
awarded to other undertakings for the purpose of resale or renting, provided that a
procuring entity shall not have exclusive or special rights to the resale of renting of the
subject of contract, and that other companies may freely sell or rent it under the same
conditions.
         A procuring entity shall notify the Office of the contracts referred to in
paragraph 2 of this Article.

                     Awarding a Contract without Prior Publication
                                         Article 112
        A procuring entity may award a public procurement contract without prior
publication:
        1) if no tenders or no adequate tenders have been received in the procedure
involving a public invitation for tenders submission, provided that the original
conditions of the procurement contract remain essentially unchanged;
        2) if the contract in question is awarded solely for the purpose of research,
experimentation, study or development, and not for profit or to reimburse research and
development expenses, provided that the awarding of such a contract does not
determine or limit any future contracts awards, when it would be necessary to ensure
that there is competition among the tenderers;
        3) if, due to objective reasons or for reasons connected with the protection of
exclusive rights, the contract in question may be executed by a specific supplier or
provider of services;
        4) if there occur any unforeseen circumstances which a procuring entity could
not influence and on account of which he was unable to execute the procedure involving
a public invitation within the stipulated period of time;
        5) if the contract in question is awarded for additional deliveries by the original
supplier intended for partial replacement of products, materials or installations, or for
the extension of the range of existing products, materials or installations, in a situation
where a change of supplier or provider of services would oblige a procuring entity to
obtain materials with different technical characteristics, which would result in
incompatibility or cause excessive technical difficulties in operation and maintenance;
        6) for goods offered and purchased on commodity markets;
        7) for additional works or services not included in the project initially awarded
or in the contract initially concluded, which, due to unforeseeable circumstances, have
become necessary for the execution of the public procurement contract in question,



                                                                                          38
provided that the contract be awarded to the contractor or service provider executing the
initial procurement contract:
         (à) if such additional works or services cannot be separated, in technical or
economic terms, from the principal contract without adverse consequences for the
procuring entity;
         (b) if the additional works or services, even though they are separable from the
initial contract, are necessary for the subsequent phases of contract execution, provided
that the total estimated value does not exceed 25% of the value of the initial contract;
         8) for new works or services representing the repetition of similar services or
works awarded to the contractor or service provider who has been awarded the previous
contract, provided that the work or services in question fit the basic project for which
the initial contract was awarded after a public invitation. A procuring entity shall
announce such a possibility immediately after the publication of the first public
invitation. A procuring entity may award a contract in this manner within a period of
three years from the day of concluding the first contract;
         9) for procuring goods sold under particularly advantageous opportunities, at a
price considerably lower than the market price;
         10) for the purchase of goods under particularly favourable circumstances from
a supplier undergoing a liquidation procedure, with the agreement of other creditors,
according to the regulations dealing with enforced settlement, liquidation and
bankruptcy;
         11) for services that are part of the continuation of a tender for designs organized
according to this Law, if the contract in question was granted to a participant or
participants who have been awarded prizes, in which case A procuring entity shall invite
all the participants for negotiations;
         12) for the services and goods of firms dealing with the training, professional
rehabilitation and employment of disabled, if the procurement in question is directly
connected with the training, professional rehabilitation and employment of such
persons, provided that the firm in question fulfils the requirements referred to in Article
45 of this Law and that the Office has given its approval. A procuring entity shall check
the price and the quality of the object of procurement by gathering several tenders,
analyzing the expenses, comparing the quality or in some other way; he shall also be
obligated to run checks taking into consideration the object of procurement as stated in
his documentation.

                              Prohibition to Restrict Participation
                                           Article 113
         The right to participate in a tender for designs may not be limited by the
territorial affiliation of the participants or by their character (physical or legal entity).
         If tenders for designs are planned for a limited number of participants, a
procuring entity shall establish clear and non-discriminatory criteria for selection.
         The number of candidates invited to participate in a tender for designs has to be
sufficient to ensure that there is real competition (no less than five, and 20 at the most).
         The jury evaluating the proposals that have been submitted shall be composed
solely of natural persons who are not in any way connected with the participants in the
tender.
         If special professional qualifications are required from the participants in a
tender, a minimum of one half of the jury members shall have the same or
corresponding professional qualifications.



                                                                                          39
        The jury shall be independent in decision making, and participation in the tender
shall be anonymous.
        The decisions of the jury shall be made on the basis of the criteria stated in the
tender advertisement and in tender documents, according to Article 55 of this Law.

                                         Prior Notice
                                         Article 114
         When awarding public procurement contracts in the water, energy,
telecommunications and transport sectors, at least once a year a procuring entity shall be
obligated, according to the provision of Article 67, paragraph
2 of this Law, to give prior notice of:
         1) basic characteristics of the work he intends to contract, if its estimated value
is not less than:
         à) 300,000,000 dinars if a procuring entity performs activities in
telecommunications sector;
         b) 25,000,000 dinars for procuring services not specified in Annex I A, with the
exception of the services referred to in item 8 and telecommunications services referred
to in item 5 of the said Annex, if a procuring entity is involved in the drawing, transfer
or distribution of drinking water, the transfer or distribution of electricity, the supply of
airports, bus, trolleys or streetcar transport services, or the supply of river ports and
other terminals;
         c) 300,000,000 dinars if a procuring entity is involved in the transport or
distribution of gas or heat, or the extraction and processing of oil or gas, or railway
transport services;
         2) the estimated total value of a public procurement contract of services in each
of the category of services specified in Annex I A that a procuring entity intends to
award in the next 12 months, if the estimated value in question is not less than
50,000,000 dinars.

                         Updating the Criteria and Requirements
                                        Article 115
        If a procuring entity decides to make a selection in the qualification procedure or
if he updates the criteria and requirements, he shall set criteria and requirements that are
not discriminatory towards tenderers.

                                  Submitting Attestations
                                        Article 116
        A procuring entity may request the candidates to submit attestations issued by
the bodies or organizations authorized to verify that tenderers comply with requirements
concerning quality standards.
        The attestations referred to in paragraph 1 of this Article shall refer to the
systems for ensuring quality according to the corresponding European standards series
EN 29000, for which the authorized bodies or organizations have to certify that they are
in compliance with the European standards series EN 45000.
        A procuring entity shall recognize the equivalent attestations issued by bodies or
organizations established in other states if this is prescribed by an international
agreement concluded by FR Yugoslavia.
        A procuring entity shall recognize other proofs of equivalent measures of
ensuring quality from service providers who do not have access to the attestations
referred to in paragraph 3 of this Article or are unable to obtain them in time.


                                                                                          40
                                       Joint Tender
                                        Article 117
        Tenderers may submit a joint tender or negotiate as a group, according to the
provisions of the Article 51 of this Law.
        A procuring entity who demands in the advertisement that only natural or legal
persons may be tenderers or candidates may not reject tenderers or candidates who
perform their activities according to the regulations of the state where their legal
residence or seat is located, and who are allowed to perform the activity that is the
object of the public procurement in question.

                      Application of Other Criteria and Requirements
                                        Article 118
        In addition to the criteria referred to in Articles 54 and 55 of this Law, a
procuring entity may apply other criteria for tenders evaluation, if those criteria are
prescribed by other regulations in force and give a certain advantage to tenderers or
candidates, and if such a manner of awarding a public procurement contract is not in
violation of international agreements concluded by FR Yugoslavia.
        The application of other criteria has to be announced in the public invitation and
in tender documents.
        If the strategic interest in awarding a public procurement contract of goods or
works is the elimination of regional differences or the provision of new jobs in
underdeveloped regions, the manner of awarding a contract referred to in paragraph 1 of
this Article may not be in contravention with international agreements concluded by FR
Yugoslavia.
        The Government shall be authorized to determine the strategic interests when
setting other criteria and requirements.

                         Observing the Principle of Reciprocity
                                       Article 119
        If tenderers offer products originating from the country with which FR
Yugoslavia has not concluded an agreement that would enable Yugoslav tenderers to
have access to the market of that country on an equal footing, such a tender may be
rejected if more than 50% of the products offered in the tender originate from the
country in question.
        The origin of products shall be established according to the relevant regulations.
According to the provisions of paragraphs 1 and 2 of this Article, software used for
equipping a telecommunications network shall be considered as a product.
        A procuring entity shall review carefully the list of countries of origin of
products, tender of which may be rejected pursuant to the provisions of paragraph 1 of
this Article.

          Suspension of Awarding Public Procurement Contracts of Services
                                        Article 120
        Having obtained the opinion of the federal Ministry authorized for economic
relations with foreign countries, the Government may temporarily suspend the awarding
procedure for public service contracts:
        1) to tenderers having seat in the country with which FR Yugoslavia has not
concluded an agreement on equal treatment of domestic and foreign tenderers;



                                                                                       41
        2) to tenderers associated to the tenderers referred to in item 1 of this Article and
having seat in the country with which FR Yugoslavia has concluded an agreement on
equal treatment of domestic and foreign tenderers, but who does not have direct and
effective links with the economy of the Republic;
        3) to tenderers having submitted tenders offering services from the country with
which Yugoslavia has not concluded an agreement on equal treatment of domestic and
foreign tenderers.

                  Preferential Award of Public Procurement Contract
                                      Article 121
        If two or more tenders are equal on the basis of the criteria stipulated in Articles
54, 55 and 56 of this Law, a procuring entity shall give priority to the tenders:
        1) the award of which cannot be suspended on the basis of the Article 120 of this
Law;
        2) the award of which would not mean that a procuring entity have to procure
materials whose technical characteristics are different from those of the existing
materials.
        According to the provisions of paragraph 1 of this Article, those tenders whose
prices do not differ by more that 3% shall be considered as equal.

                                  Documentation Archive
                                          Article 122
        Procuring entities shall keep the documentation concerning procurement
procedures for awarding contracts in the water, energy, telecommunications and
transport sectors pertaining to:
        1) the qualifications and selection of tenderers and the public procurement
contract award;
        2) applying the procedure without a prior publication, stipulated in the Article
112 of this Law;
        3) awarding of public procurement contracts of services, the application of
technical specifications and standards, and the selection of the public procurement
procedure, when the provisions of this Law have not been applied.
        A procuring entity shall keep the documentation referred to in paragraph 1 of
this Article for at least four years following the date of the conclusion of a contract, and
shall forward the data to the authorized body upon its request.
        Paras. 3, 4 and 5 - Deleted.


           VI. LOW-VALUE PUBLIC PROCUREMENT CONTRACTS

 The Notion of Low-Value Public Procurement Contract and the Low-Value Contract
                                    Award Procedure
                                       Article 123
        Low-value public procurement contract, pursuant to the provisions of this Law,
is the contract whose estimated value is lower than the value, at annual level determined
by the law regulating the annual Republic Budget.
        The Law referred to in paragraph 1 of this Article may also define the value of
the contract which represents the maximum limit in the budget year below which
procuring entities have no obligation to apply the provisions of this Law.



                                                                                          42
        Each year, when preparing the annual Republic Budget proposal, the
Government shall determine the value representing the upper threshold in the budget
year below which procuring entities may apply the low-value public procurement
procedure.
        In the low-value public procurement procedure, a procuring entity shall obtain at
least three tenders and shall notify the tenderers of the elements included in the public
procurement price (e.g. compensation for transport and insurance expenses, customs
duty, turnover tax, excise, etc.).
        Tenderers may submit only one tender each and may not alter it.
        A procuring entity and the tenderers shall not be allowed to negotiate elements
of the tenders.
        Low-value public procurement contract shall be awarded to the tenderer offering
the lowest price under the equal conditions.

                            Preparation of Internal Regulations
                                        Article 124
        For the award of low-value contract, a procuring entity shall lay down the award
procedure by an internal regulation, with regard to the provisions of this Law.
        By the internal regulation referred to in paragraph 1 of this Article, a procuring
entity shall particularly regulate:
        1) the method of contract performance with regard to the estimated value,
technical and technological requirements and the financial consequences of the contract;
        2) the method of preparing tender documents;
        3) the persons authorized for collecting tenders by telephone, telefax and the
like, and in particular the method of verifying the tendered price;
        4) the method of documenting the tenders and keeping records of
documentation;
        5) the method of contract performance once it is concluded and monitoring the
performance of low-value contracts, in particular within the guarantee period;
        6) the method of using purchasing orders and other standard documents in this
procedure prepared in advance; a procuring entity shall prescribe a threshold allowing
previously prepared standard documentto be used for each individual public
procurement contract.
        A procuring entity shall determine the method for proving that the minimum
requirements for tenderers have been complied with, pursuant to the provisions of this
Law.

                Keeping Records of Concluded Low-Value Contracts
                                    Article 125
       A procuring entity shall keep records of low-value contracts, concluded
following the low-value contract award procedure, separately for goods, services and
works.


                    VII. PUBLIC PROCUREMENT RECORDS

                                 1. Keeping Records
                          Types of Public Procurement Data
                                     Article 126



                                                                                       43
        A procuring entities shall collect and keep records of certain data concerning
awarded public procurement contracts, pursuant to the provisions of this Law; they shall
keep records separately for supply contracts, service contracts and works contracts, as
well as contracts in the water, energy, telecommunications and transport sectors.
        Paragraph 2 - Deleted.
        The Minister of Finance and Economy shall prescribe standard forms for
documenting public procurement data.

                                 The Content of the Report
                                         Article 127
        Reports on public procurement contracts forwared by procuring entities to the
Public Procurement Office shall contain the following information:
        1) the estimated total value of concluded contracts,
        2) the number and value of concluded contracts, specification of the types of
procedures according to which contracts were awarded, listing types of subjects,
specification of types subjects, specification of the types of criteria for evaluating
tenders, the title and seat of the other contractual party, date of contract conclusion,
number and value of contracts concluded with contractual parties based in the Republic
of Serbia, the Republic of Montenegro and in foreign countries, the number of tenders
received and information about the realization of the contracts.
        If a contract was awarded in restricted or negotiated procedure, the report shall
also specify the bases as defined in appropriate articles of this Law.
        A procuring entity shall record in the report the data on low-value contracts
separately.
        The Minister of Finance and the Economy shall prescribe more closely the
content of the report referred to in paragraph 1 of this Article.
        A procuring entity shall forward to the Office the report on public procurement
contracts concluded in the course of the previous year by February 28 of the current
year at the latest.
        The Office may demand from any procuring entity a report on each individual
public procurement contract, with additional information, if that would be necessary for
keeping records of data in the area of public procurement or the protection of the public
interest.
        The Office shall compile a cumulative report and shall submit it to the
Government by May 31st of the current year at the latest.


   VIII. PROTECTION OF THE TENDERERS’ RIGHTS AND THE PUBLIC
                            INTEREST

                         The Body Ensuring Legal Protection
                                       Article 128
        In all the phases of the public procurement procedure, the protection of the
rights of tenderers and the public interest shall be ensured by the Commission for the
Protection of Rights (hereinafter referred to as: the Commission), established at the
Office

             The Composition and the Appointment of the Commission
                                   Article 129
       The Commission shall have a Chairman and four members.


                                                                                      44
        The Chairman and the members of the Commission shall be appointed by the
Government, acting upon the proposal of the Minister of Finance.
        The Commission Chairman and members may not be parliamentary deputies or
local council members, may not hold political or administrative posts, nor may they
engage in other professional activities or hold such office as may influence their
independence in their work or in any way lessen their reputation or the reputation of a
Commission member or Chairman.
        The Chairman of the Commission shall be a graduate lawyer who has passed the
Bar examination. The Commission Chairman shall in respect of rights and
responsibilities deriving from employment be ranked equal to a public official heading a
separate organization.
        A minimum of two members of the Commission shall be graduate lawyers, and
the remaining members may be graduate economists or engineers. Commission
members shall in respect of rights and responsibilities deriving from employment be
ranked equal to assistant public officials heading a separate organization.
        The term of office of the Chairman and the members of the Commission shall be
four years; upon its expiry, they may be appointed again.
        The Commission Chairman or member will be relieved of duty against his wish:
        1) if sentenced to an unconditional term of imprisonment of at least six months'
duration or convicted of a punishable offence rendering him unfit to perform his duties;
        2) If it is established on the basis of the findings and opinions of the competent
health authority that he has been permanently deprived of the capacity to perform his
duties;
        3) If it is established that he is performing his duties in contravention of
paragraph 3 of this article.

                        Commission’s Operating Procedure
                                    Article 130
       The Commission’s operating procedure shall be determined by a special act
passed by the Commission.
       The Commission shall submit a report on its work during the preceding year to
the Government and the National Assembly no later than February 1 of the current year.

                                     Secrecy Safeguard
                                         Article 131
        The members of the Commission shall keep the secrecy of data relating to state,
military, official or trade secrets, and shall treat the documents according to their level
of confidentiality.

                The Right to Submit Requests for Protection of Rights
                                    Article 132


       A request for protection of rights may be submitted by any person who has or
has had an interest in being awarded a public procurement contract (hereinafter: the
claimant).
       A request for the protection of the public interest may be submitted by the
Office during all phases of the public procurement procedure.

                     Exclusions from the Right to the Protection of Rights


                                                                                        45
                                       Article 133

       Requests for the protection or rights may not challenge the following:
       1) criteria for evaluation of tenders determined in accordance with this Law;
       2) restrictions for participation determined in accordance with this Law.

                Consequences of a Submitted Request for the Protection of Rights
                                        Article 134
         A request for the protection of rights shall result in suspension of any further
activities of the procuring entity in awarding a public procurement contract pending the
issue of a decision on the request for the protection or rights, unless the Commission,
acting on a proposal by the procuring entity, rules otherwise.
         In adopting the decision referred to in paragraph 1 of this Article, the
Commission shall take into consideration consequences a suspension of activities could
inflict on participants in the public procurement process as well as the need to protect
the public interest.
         If the Commission adopts the request referred to paragraph 1 of this article, the
procuring entity shall inform all participants in the procedure thereof.

         Time Limits and Method of Submitting Requests for the Protection of Rights
                                         Article 135
        A request for the protection or rights may be submitted in any phase of the
public procurement procedure and against any action of the procuring entity, unless
otherwise stipulated by this Law.
        After the passing of the decision on awarding a public procurement contract or
the decision recognizing qualifications, the time limit for submitting a request for the
protection or rights shall be eight days from the date of reception of a public
procurement contract award notice, or qualification notice, with an explanation.
        A request for the protection or rights may not challenge actions undertaken by
the procuring entity during the procedure of awarding a public procurement contract, or
the qualification procedure, if the claimant had been aware of could have been aware of
the reasons for its submission before the procuring entity had made the decision on
awarding the contract or on qualifications and the claimant had not submitted the
request before the adoption of the said decision.
        A request for the protection of rights shall be submitted to a procuring entity in
three copies, directly or by registered mail with a return certificate.
        A copy of the request for the protection or rights shall simultaneously be
forwarded by the claimant to the Commission.
        A procuring entity receiving a request for the protection of rights shall inform
thereof all participants in the proceeding of awarding a public procurement contract no
later than three days after the reception of that request.

                      Contents of the Request for the Protection of Rights
                                        Article 136
        A request for the protection of rights shall contain the following information:
        1) name and address of the claimant, and the contact person;
        2) name and address of the procuring entity;
        3) the public procurement which is the subject of the request for the protection
of rights, or the notice on awarding the public procurement contract or recognition of
qualifications;


                                                                                       46
        4) the violation(s) of the legal provisions which regulate the public procurement
contract award procedure;
        5) facts and evidence supporting the said violation(s);
        6) a certificate on the payment of the fee referred to in Article 143 paragraph 1
of this Law;
        7) the signature of the claimant.
        If a request for the protection of rights does not contain all the information listed
in paragraph 1 of this article, the procuring entity shall promptly inform the claimant to
amend the request within a period of no more than three days.
        If the claimant fails to act in accordance with time limit referred to in paragraph
2 of this article or fails to amend the request as specified by the procuring entity, the
procuring entity shall reject such a request administrative procedure.
        Claimants may appeal to the Commission against decisions issued by procuring
entities referred to in paragraph 3 of this article within a period of no more than three
days after the date of reception of the procuring entity's notification thereof.

                   Prior Verification of a Request for the Protection of Rights
                                        Article 137
        After receiving a request for the protection of rights, a procuring entity shall
check whether it has been submitted in a timely manner and by a legitimate claimant.
        Requests for the protection of rights submitted in an untimely manner or by
persons who are not legitimate claimants shall be rejected by the procuring entity in
administrative procedure.
        Claimants may appeal to the Commission against decisions issued by procuring
entities referred to in paragraph 2 of this article within a period of no more than three
days after the date of reception of the procuring entity's notification thereof.

          Decision of a procuring entity in respect of a Request for the Protection of
                                           Rights
                                         Article 138
        After prior verification, a procuring entity shall decide on a request for the
protection of rights by either:
        1) annulling the public procurement procedure in its entirety or partly, or
        2) rejecting the request for the protection of rights.
        The decision referred to in paragraph 1 of this article, with reasons, shall be
issued by the procuring entity and forwarded to the claimant within a period of no more
than 10 days from the date of the reception of the request for the protection of rights.
        A claimant who fails to receive a decision of the procuring entity within the time
limit referred to in paragraph 2 of this article may continue the procedure before the
Commission by issuing a written notification thereof within the following three days, in
which period the claimant shall also inform the procuring entity of the decision to
continue the procedure.
        Claimants failing to continue the procedure within the period referred to in
paragraph 3 of this article shall be deemed not to have initiated the protection procedure
at all.

          Continuation of the Procedure Following the Procuring Entity's Decision
                                      Article 139
       The written decision referred to in Article 138 paragraph 1 item 2) of this Law
also contains an invitation to the claimant to inform the procuring entity in writing,


                                                                                          47
within no more than three days of reception of the decision, whether he intends to
continue the procedure before the Commission, as well as a notice of the consequences
of not abiding by the prescribed time limit.
        A copy of the written decision to continue the procedure shall be forwarded by
the claimant to the Commission.
        Following reception of written notification of the claimant to continue the
procedure before the Commission, the procuring entity shall forward all relevant
documents to the Commission within the next three days.
        If the claimant does not act in the manner and within the time period referred to
in paragraph 1 of this article, the procuring entity shall decide to reject the request.
        Claimants may appeal to the Commission against decisions referred to in
paragraph 4 of this article within a period of no more than three days after the date of
reception of the notification.

                    Continuation of the Procedure before the Commission

                                        Article 140
        The Commission shall decide within the framework of the submitted request for
the protection of rights, as well as on violations of which the claimant was not aware or
could not have been aware and which affected the decision of the procuring entity in the
public procurement procedure.
        The Commission shall use all evidence that it deems conducive to the
clarification of the subject of the procedure and the passing of a lawful and correct
decision.

                            Time Limits for Issuing Decisions
                                        Article 141
        The Commission shall pass its decisions on requests for the protection of rights
within 15 days of having received all relevant documentation.
        The Commission shall pass its decision on appeals against procuring entities'
decision within 8 days of the reception of the appeal.
        In especially justified cases, the time limit referred to in paragraph 1 of this
article may be extended by a further 10 days, of which the claimant and the procuring
entity shall be informed.
        The decision referred to in paragraph 1 of this article shall be forwarded by the
Commission to the procuring entity and the claimant, and, where the request for the
protection of rights was submitted after the award of the public procurement contract,
also the selected tenderer.

                      Acquisition of Information and Expert Assessment
                                        Article 142
        If the Commission determines that the request for the protection of rights does
not contain all the mandatory data referred to Article 136 paragraph 1 and Article 143
paragraph 1 of this Law, it shall invite the claimant to amend the request.
        The time limit for submitting additional information is three days from the date
the claimant receives the request for amendment.
        Before issuing its decision, the Commission may request additional information
from the procuring entity, the claimant or other participants in the procedure, seek
expert opinion or insight into other documents held by parties to the procedure of




                                                                                      48
awarding a public procurement contract, as well as collect other information it needs to
render its decision.
        The Commission may also request from other persons information and opinions
it requires for the performance of its duties.
        The request for information or opinions shall contain reasons for the request.

                                    Expenses of the Procedure
                                         Article 143
        A party submitting a request for the protection of rights shall pay to a special
account of the budget of the Republic of Serbia a tax of 40,000 dinars, or 20,000 dinars
where a low-value procurement contract is concerned.
        Each party to the procedure shall bear its own expenses incurred by its actions.
        If the request for the protection or rights is justified, acting upon a written
request by the claimant the procuring entity shall compensate the claimant for his
expenses in connection with the protection of rights.
        If the request for the protection or rights is not justified, acting upon a written
request by the procuring entity, the claimant shall compensate the procuring entity for
its expenses in connection with the protection of rights.
        In their requests, the parties shall specify precisely the expenses for which they
seek compensation.
        Compensation may be sought until the issue of the decision of the procuring
entity or Commission.
        The decision on the expenses shall be rendered by the Commission. The
Commission's decision shall be enforceable.

                                The Commission’s Decision
                                          Article 144
         The Commission shall decide on a request for the protection of rights by either:
         1) rejecting the request for the protection of rights, in cases where the request
for the protection of rights or decision to continue the procedure before the Commission
was submitted in an untimely manner or by a person who is not a legitimate claimant, or
where the claimant failed to amend the request within the prescribed time limit, or failed
to amend the request in accordance with the invitation to amend the request referred to
in article 142 of this Law;
         2) suspending the procedure, based on reception of a written notification of
withdrawal of the request for the protection of rights before the issue of the decision.
         The Commission shall decide on a request for the protection of rights by either:
         1) rejecting the request for the protection of rights as unfounded;
         2) ruling positively on the request and rejecting the public procurement contract
award procedure in its entirety or partially;
         3) confirming the conclusion of the procuring entity or annulling the conclusion
of the procuring entity and order further action by the procuring entity in connection
with the content of the request for the protection of rights referred to in Article 136
paragraph 1 of this Law or in connection with prior verification of the request for the
protection of rights referred to in Article 137 of this Law or in connection with the
continuation of the procedure in respect of the adoption of the decision of the procuring
entity referred to in Article 139 of this Law.
         The Commission shall provide reasoning for its decision.
         A procuring entity shall act according to the Commission’s decision within no
more than 30 days of the date of reception of the decision.


                                                                                        49
        The Commission may order the procuring entity to submit a report and
documentation on the implementation of the public procurement contract award
procedure in which a request for the protection of rights was submitted, or a report or
documentation on a repeated procedure.
        Procuring entities shall submit the report and documentation referred to in the
preceding paragraph within a time limit determined by the Commission, which may not
be more than six months from the date of the reception of the Commission's decision.
        If the Commission determines on the basis of the report and documentation that
irregularities have not been eliminated, or that the Commission's instructions have been
disregarded, or if the procuring entity fails to submit the requested documents within the
specified time limit, the Commission shall inform the Government and the National
Assembly thereof.
        No complaint may be lodged against the Commission’s decision, nor may
administrative proceedings be initiated against it.
        The claimant may before the authorized court claim the compensation from a
procuring entity.


                           IX. NULLITY OF CONTRACTS

                                            Nullity
                                         Article 145
        A public procurement contract shall be deemed as null and void:
        1) if it has been concluded in contravention of the provisions of this Law
regulating the manner and the procedure of awarding public procurement contracts;
        2) if a procuring entity has acted in contravention of the provisions on
determining the value of public procurement per lot;
        3) if it has been concluded in order to settle rights and liabilities, without
applying the public procurement procedure;
        4) if a procuring entity has awarded the contract under conditions different from
those prescribed by this Law or to a tenderer who has not been selected as the best one;
        5) if a procuring entity awards contract performance, or authorizes a third person
to perform the contract, or a person who is not the procuring entity according to the
provisions of this Law, so as to avoid the application of this Law;
        6) if the alterations of and additions to the original contract have been effected in
contravention of the provisions of Article 87, 92 and 100 of this Law;
        7) if it has been concluded in contravention of the Commission’s decision, and
        8) if it has been concluded without a prior public procurement contract award
procedure, which a procuring entity was obligated to apply according to the provisions
of this Law.


                               X. PENAL PROVISIONS

                                       Violations
                                       Article 146
       A procuring entity shall be fined the amount of 100.000 to 200.000 dinars:
       1) if it awards a public procurement contract without prior applying the
procedure prescribed by this Law (Article 20);



                                                                                          50
        2) if it commences the public procurement procedure before the prescribed
conditions are fulfilled (Article 24 and 45);
        3) if the subject of a contract, contract requirements, technical specifications or
other elements of the public invitation are adjusted to a specific tenderer, or if a contract
is awarded to a tenderer who has participated in the preparation of tender documents or
part thereof (Articles 6 and 36);
        4) if it awards a contact in violation of the principle of the equality of tenderers
(Article 8);
        5) if it does not protect the data contained in tender, according to the degree of
confidentiality (Articles 9-12 and 82);
        6) if it does not keep records or keep the documentation of public procurement
(Article 12);
        7) if it does not forward to the Office the information of rejected tenders for
reasons of attempts of bribery (Article 15);
        8) if it does not forward tender documents to everyone asking for it, according to
the public invitation
(Articles 28 and 29);
        9) if it fails to observe the time limits for publishing public invitation and
tenders submission (Articles 59- 68);
        10) if it fails to publish the prescribed notices in Article 70 of this Law in “The
Official Gazette of the Republic of Serbia” or if it sends them to be published in other
public media without having sent them to “The Official Gazette of the Republic of
Serbia” for publication (Article 69);
        11) if it does not observe the technical norms, standards and other technical
regulations currently in effect while preparing tender documents (Articles 35-44);
        12) if it sets conditions and criteria for participation that are not in conformity
with this Law, or if it alters the conditions and criteria after the publication of a public
invitation without notifying the tenderers (Articles 29 and 45-58);
        13) if it fails to forward the information on conducted public procurement
procedures (Article 127);
        14) if it concludes a public procurement contract before the expiry of the time
limit for submitting requests for the protection of rights referred to in Article 135
paragraph 2 of this Law;
         15) if it acts in contravention of the provisions of Article 134 paragraph 1 of
this Law regarding the suspension of the procedure in the event of the submission of a
request for the protection of rights;
        16) if it fails to submit the documentation referred to in Article 139 paragraph 3
of this Law;
         17) if it fails to execute within the prescribed time limit the decision of the
Commission referred to in Article 144 of this Law.
        The liable official of a procuring entity shall also be fined the amount of 7.000
to 10.000 dinars for a violation referred to in paragraph 1 of this Article.

                                        Article 147
       A tenderer shall be fined the amount of 100.000 to 200.000 dinars:
       1) if it fails to notify a procuring entity of alterations to the tender (Article 46
paragraph 4);
       2) if it supplies false information concerning professional references (Article
47);



                                                                                          51
        3) if it supplies false information in the documents proving the compliance with
the conditions set by a procuring entity (Articles 46 and 48).
        The liable official of the tenderer shall also be fined the amount of 7.000 to
10.000 dinars for a violation referred to in paragraph 1 of this Article).
        Natural person as a tenderer shall also be fined the amount of 7.000 to 10.000
dinars for the violation referred to in paragraph 1 of this Article.


                 XI. TRANSITIONAL AND FINAL PROVISIONS

                                       Article 148
        On the date this Law enters into force, the provisions of regulations that are in
contravention of this Law shall no loner apply to the public procurements of the
Government, ministries, special organizations, public services and other organizations
founded by the Republic.
        The provisions of this Law shall apply to the public procurements of other
subjects considered to be procuring entities pursuant to this Law as of January 1st 2003.
        Public procurement procedures initiated by persons considered to be procuring
entities pursuant to this Lawfor which public invitations were published before entering
into force of this Law shall be performed according to the regulations that were in effect
when they have been commenced.

                                     Article 149
       Until the law regulating the Republic Budget comes into effect in 2003, public
procurement whose estimated value is below 350.000 dinars shall be considered to be of
low value according to this Law.

                                        Article 150
The Public Procurement Office shall commence its work not later than a year of the date
this Law enters into Until the commencement of the work of the Office referred to in
paragraph 1 of this Article, its work shall be performed by the Republic Common
Affairs Office, which shall report its work to the Government once a month.

                                       Article 151
        Until the regulations referred to in Article 137, paragraph 7 of this Law come
into effect, the Government shall give its approval to individual decisions on appointing
experts.

                                       Article 152
        This Law shall come into effect on the 8th day after its publication in “The
Official Gazette of the Republic of Serbia”.




                                                                                       52
                                         АNNEX I А:

                                           Services
Category                                            Object
no.
    1.       maintenance and repair
    2.       land transport (except for railway transport), including transport in armored
             vehicles and courier services (except for postal transport)
    3.       air transport of passengers and goods (except for postal transport)
    4.       land and air postal transport (except for railway transport)
    5.       telecommunications (except for voice telephony, radio telephony, paging and
             satellite services)
    6.       financial services:
             - insurance services,
             - banking and investment services (except for procurement of financial services in
             connection with issuing, selling, buying or transferring securities or other financial
             instruments, and the services of the National Bank of Yugoslavia)
    7.       computer and related equipment
    8.       research and development (except for procuring research and development
             services where the research results are not used solely by the orderer for his own
             needs, provided that the orderer bears the costs in their entirety)
    9.       accounting, auditing and bookkeeping
   10.       market research and public opinion surveys
   11.       management consulting (except for arbitrage, settlement and similar services)
   12.       architectural, engineering, urban planning and landscape architecture services;
             technical testing and analyses
   13.       advertising
   14.       building cleaning and real estate management services
   15.       publishing and printing services on a part-time or contractual basis
   16.       garbage removal, sanitary and other related services

                                         АNNEX I B:
                                           Services
  Category                                          Object
    no.
    17.       hotel and restaurant services
    18.       railway transport services
    19.       river transport services
    20.       additional and auxiliary transport services
    21.       legal services
    22.       personnel recruitment
    23.       investigative and security services (except for transport in armored vehicles)
    24.       education and professional training
    25.       health care and social services
    26.       recreational, cultural and sports services
    27.       other services



                                                                                            53
                                 АNNEX II:
                             Construction work
Class   Group    Sub-                             Description
                group
 50                      CONSTRUCTION AND CIVIL ENGINEERING
         500             General-type construction and civil engineering work
                         (without special specifications) and demolition
                500.1.   General-type construction and civil engineering work (without
                         special specifications)
                500.2.   Demolition
         501             Construction of objects and parts thereof
                501.1.   General-type construction work
                501.2.   Construction of eaves and roofs
                501.3.   Construction of chimneys, furnaces and fireplaces
                501.4.   Protection against water and damp
                501.5.   Renovation and maintenance of external walls (refilling brick
                         joints with mortar, cleaning, etc.)
                501.6.   Raising and dismantling scaffolding
                501.7.   Other specialized activities in connection with construction
                         work, including carpentry
         502             Civil engineering: building roads, bridges, railways, etc.
                502.1.   General-type civil engineering work
                502.2.   Earthwork
                502.3.   Building bridges, tunnels and shafts; drilling
                502.4.   Hydraulic engineering and water management (rivers, canals,
                         ports, tributaries, dams, etc.)
                502.5.   Building roads, railway lines, airports and sports facilities
                502.6.   Specialized civil engineering work in connection with water
                         (irrigation, land drainage, waterworks, wastewater removal,
                         sewage, etc.)
                502.7.   Other types of civil engineering work, including specialized
                         activities in other areas of civil engineering
         503             Installations
                503.1.   General-type industrial work
                503.2.   Installations for supplying gas and water, and sanitary
                         equipment installations
                503.3.   Heating and ventilating installations (central heating, air
                         conditioning, ventilation)
                503.4.   Isolation work
                503.5.   Electrical installations
                503.6.   Installation of aerials, lightning conductors, telephones, etc.
         504             Finishing constriction work
                504.1.   General-type finishing construction work
                504.2.   Façade and stucco work
504.3.   Interior woodwork (including laying parquet floors)
504.4.   Painting, glazing and wallpapering
504.5.   Laying tiles and other floor and wall covering
504.6.   Other types of finishing and additional construction work
         (installation of fireplaces, etc.)




                                                                     55

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:33
posted:7/21/2011
language:English
pages:55
Description: Public Procurement Contract document sample